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Do ecolabels enthuse or confuse?

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TerraCycle eco-label on diaper packagingAs TerraCycle grows, our label can be seen on an increasing amount of consumer packaging. What’s even more exciting is the fact that consumers are becoming more aware of our label and what that means. However, this got me thinking about other ecolabels. There are hundreds of different ones out there, and each is trying to convey to the consumer some environmental benefit by purchasing their product. With so much variance and lack of standardization, do ecolabels mean anything at all? Or is it just a cheap way to make your product look sustainable to consumers?

This being said, the idea of labeling consumer products and food is incredibly important since the labels help consumers make environmentally friendly decisions while shopping. This in turn can help stimulate a higher demand for green products, therefore influencing companies to become more sustainable and help shape a better future. However, the lack of regulation has made it possible for an abundance of seals to evolve, thus depreciating the value of ecolabels in the mind of the consumer. It may not be fair, but many companies have taken full advantage of this differentiation tool in an attempt to greenwash clients. It’s no wonder that consumers have grown tired of the multiple logos on each item they pick up. With this is mind, is there any way we can decrease this stigma so consumers can trust ecolabels again?

A 2012 BBMG study showed that consumers favored certifications as the trusted source for whether a product is sustainable or socially responsible, with more than 40 percent of consumer surveyed selecting seals or labels as the most trusted source. However the same study showed that 65 percent of consumers feel that company’s CSR claims were not believable. This is an interesting dichotomy, showing that many consumers use eco-labeling as a reference point put are still quite skeptical on company claims of responsibility.

To understand this gap, it’s crucial to know where all these green seals are coming from. Besides the appliance and automobile industries, ecolabels are voluntary sustainability measurements that companies apply for from an objective third party. As consumers grow more eco-conscious, the ecolabel is a way for companies to differentiate their products from their competitors. For example, the intent of the TerraCycle logo is to let consumers know that the packaging is recyclable by visiting our website and signing up for a Brigade. Our logo even looks like the recycling symbol to help further simplify our message. However, it became more complicated when industry associations began to set their own standards and any company that complied would be granted the label. This all sounds great, but some industry associations set minimum stipulations for sustainability and all companies that follow it will get the ecolabel. Because of this, many companies appear to be more sustainable then they really are.

Until there is more standardization, there is not much we can do to combat the proliferation of ecolabels except letting the market take its course. In this sense, smaller ecolabels will fade out as more reputable ecolabels gain brand loyalty among consumers. This can already been seen in the business-to-business sector where ecolabels such as Fairtrade and the Marine Stewardship Council are seen as reliable seals. Although market controls might be our only possibility of waning out ecolabels in the US, the European Union has taken steps towards standardization by starting the EU Ecolabel. The EU Ecolabel is voluntary and focuses on the lifecycle of a product. Each product has their own specifications that concentrate on the stages of its lifecycle where it has the highest environmental impact. The EU Ecolabel is used for consumer products and businesses but has not tackled food or medicine. Regardless, it’s a step in the right direction and we can learn a great deal from their efforts.

Whether you are a concerned consumer or a manager worried which ecolabel to place on a product’s packaging, the following labels should be at the top of everyone’s green checklist.

  • Compostable
  • Cradle to Cradle
  • Demeter Biodynamic
  • DFE
  • Fairtrade
  • Forest Stewardship Council
  • Green Seal
  • Marine Stewardship Council
  • NON GMO
  • OMRI Listed
  • Rainforest Alliance Certified
  • SCS Certified Biodegradable
  • USDA Organic

Remember, consumers buy products from companies they feel have the same beliefs as themselves. To avoid consumer mistrust, stick with labels that are clear and align with your company’s mission.
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