the advantages and disadvantages of ecolabels

Product labeling is a tool for promoting markets with specific characteristics. The labels provide information about those characteristics that might normally be unobservable or difficult to assess.

If systematically and structurally implemented, labels are a source of reliable and credible information.

Ecolabels are a specific type of product labeling that certifies the environmental performance of products and services. To be certified with an ecolabel, the product or service must demonstrate that it can reduce the overall environmental impact of its production or use through by fulfilling specific, predefined criteria.

In a sense, ecolabels are seals of approval that declare that a certified product is more sustainable and superior than functionally or competitively similar products.

Businesses, private organizations, and governments began developing ecolabels as a means to both encourage the consumption of more environmentally friendly products and encourage the use of sustainable production production practices.

The most common advantages of ecolabels include:

  • Stimulation of innovation as more sustainable products are invented
  • Development of markets that cater to evolving consumer interests
  • Opportunities for education
  • Creation of new value chains by establishing new networks of production
  • Monitoring of environmental claims​
  • Influencing consumer behavior towards more environmentally friendly products
  • Promotion of economic efficiency in response to predefined standards
  • Economic support for sustainability 
  • Reallocation of the costs of environmental improvement 

The most common disadvantages of ecolabels include:

  • Potential greenwashing when private, unregulated ecolabels are used
  • Consumer/producer disinterest​ in paying a premium for sustainable products
  • Difficulty in proving a positive impact​
  • Potential redundancy if a number of ecolabels certify the same characteristics
  • Prohibitive costs for certification, especially for smaller producers
  • Provide a basis for price markups

In light of the identified advantages and a desire to drive economic and environmental change, the importance and prevalence of certification schemes is growing.

Accordingly, methods for certification must adapt to changing perspectives and advancements in technology. Regulation will be essential to maintaining consumer confidence.

While there are still no guarantees of success, management efforts may be on the right track. However, there must be some sort of economic reward in order influence the actions of stakeholders.

Thus, ecolabels are tools that can be used in combination with other efforts to create effective, long-term and consumer-based change

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