THE MARKET for eco-labels has been likened to selling stickers as it nears saturation point.
Joint research by IMD, the International Institute for Management Development, and EPFL, the Ecole Polytechnique de Lausanne, found that the process of ethical labelling has become so fragmented that the current industry perception is dominated by wide-ranging reappraisal.
In fact, the process is becoming as confusing for companies as it is for consumers.
There are currently well over 400 eco-labels used across 25 industries, prompting growing concerns over proliferation, credibility and consumer understanding.
IMD and EPFL researchers surveyed more than 1,000 executives around the globe about their attitudes towards the labels.
“It’s not just consumers who are confused. Selecting an eco-label has become a highly complex decision for firms, said IMD professor Ralf Seifert, the study’s co-author.
“The trend towards fragmentation, which is made worse by a lack of consensus over qualifying criteria, is clearly causing ever more opposition and frustration.”
Seifert said the initial momentum and high expectations of more than 30 years ago are giving way to different challenges ones that urgently need to be addressed.
Major international companies such as Hewlett-Packard, Nestlé, Canon, Sara Lee and E.ON took part in the study, which first sought to investigate why firms adopt eco-labels.
Respondents listed brand-strengthening, addressing consumers’ sustainability demands and protecting against pressure-group attacks as key benefits of the practice.
But they also expressed what the study called “substantial scepticism” over eco -labels’ enduring credibility and the rigour of the criteria and certification procedures.
One company today researchers: “In some areas the market looks more like a new industry of ‘selling stickers’.”
Duncan Pollard, Nestlé’s sustainability advisor, said: “We may be seeing the first serious reappraisal of the conventional wisdom that if you wish to prove you’re sustainable you need a certification logo.”
The findings, which mirror a similar report by the think tank SustainAbility late last year, highlight a desire for improved consolidation and standardisation as industry adoption of eco-labelling moves towards saturation.
Read the report Footprint Forum: Preparing for change in the ethical landscape