Sustainability labels lose their edge
By Idealog,
More and more companies are waking up to the imperative of social responsibility – but the golden age of the sustainability label is over, a report by London consultancy SustainAbility has concluded.
According to Signed, sealed, delivered? sustainability labels cannot deliver sufficient business value or drive
the level of consumer demand needed to transition to a sustainable
economy.
“Labels now need to fade into the background, acting as trust marks for those who seek them and leaving brands to delight and mobilise consumers into adopting more sustainable behaviours," said lead author Patrin Watanatada.
The report assesses the value and challenges faced by businesses when using sustainability labels to improve economic, environmental and social outcomes across global value chains.
The problems the report highlights with the current model include the reduced value of sustainable labels. It said labels no longer had the value they once had – Fairtrade-branded chocolate bars in the UK have now become the norm, for example, so the label now fails to differentiate brands.
Another problem is a lack of familiarity with sustainability labels, where uninformed customers don’t know which brands to choose.
The report recommends shifting to a new model where companies no longer rely on third-party labels to promote sustainability. Rather, they should work on incorporating higher standards and using strategic marketing in order to generate consumer demand and shape a more sustainable market.
“The time has come to reassess how businesses both deliver and demonstrate how we can support thriving communities in our supply chains,” said Ben Packard, VP of global responsibility at Starbucks.
“The trick for all of us is to figure out how we do it in a way that creates value to suppliers, operates at scale and creates meaningful connections for consumers.”
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See also
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Is fair trade a fad?
Idealog #15, page 71
Comments
Hamish Anderson
I haven't read the report yet but I disagree with this story. Labels representing third party verification provide credibility to brands and help consumers make informed choices. Look at the recent angry debate around CottonSofts / APP. There just aren't enough brands out there yet who consumers can trust in their own right - local exceptions being the likes of ecostore.
Surely its stating the obvious by recommending a new model where we no longer need to rely on third party labels. Maybe in Europe things are more advanced but in this market we just ain't there yet and such labels still provide great value I believe.
ramon
Truly “sustainable consumer behaviour” surely involves most trade occurring within our local communities, right?
Kath Dewar
Context as always is important - Fair Trade certification is a mature and widely adopted third party accreditation in the UK market but still in its infancy in NZ.
Colmar's B3W research clearly shows Kiwi consumers want to choose brands that do less environmental and social harm but don't think they have the info they need to make those decisions.
So at this stage investing in 'gold standard' third party certifications makes sense for brands seeking credibility.
Who are you going to trust more - All Good bananas who are Fair Trade certified, or Dole who use their own in-house 'ethical choice' label?
At the moment not many NZ consumers know the difference but experience overseas suggests that will change.
In more mature markets, smart players like Puma and Patagonia are moving beyond the 'box ticking' into building brand differentiation through their radical transparency. That kind of disclosure enables more meaningful comparison and presents them as organisations committed to reducing the harm they do.
Michael Hooper
NZ is fortunate to already have a “gold standard” ecolabel - Environmental Choice NZ. It has been rated in a UK government study (DEFRA) as “world-class” and has been taken by the UK government as an example of best practice, worth following in their own ecolabelling development.
As for the argument that more products attaining a standard therefore reduces the credibility of the standard - thank heavens that doesn't apply to educational qualifcations! It's a spurious and facile argument.
In the case of ECNZ, the standards are regularly reviewed and the bar lifted in line with tech developments. When that happens, some of the products that no longer comply do fall off the licensee list, and often they are motivated to advance their own processes to regain their place, due to both environmental commitment - and competition!
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