What are Ecolabels? The Objectives of Ecolabeling

In a survey, 84% of respondents said they would switch away from brands that conduct poor environmental practices, and the market is shifting to reflect their desires.

More people are choosing environmentally and socially conscious companies. Products marked as sustainable are enjoying a 33% share of market growth.

Ecolabels recognize a product or service as having less environmental impact than similar products. They’re increasingly popular and vital for customers to identify goods, services, and brands that align with their values.

Ecolabels are more complex than what they say on the packaging. This infographic gives an overview of the practice, its goals, pros and cons, and tips on how to make them effective for one’s business.

What are Ecolabels?

Ecolabels are certifying marks or logos businesses use to denote that their product or service is less environmentally impactful throughout its lifecycle than others. They help customers quickly identify sustainable products or services based on their presence in packaging design.

International organizations, government bodies, and private entities can issue ecolabels. The credibility of their claims may vary. An ecolabel can come from the company selling the products or an independent, internationally managed group of environmental experts.

Types of Ecolabeling

Ecolabels differ based on their claims and issuers.

1. Type I: The ‘classic’ label

Type I ecolabels are third-party environmental certifications that meet international standards and criteria for various products and services. These labels are given to businesses that meet strict criteria for manufacturing processes, materials used, packaging, and overall environmental impact.

The Type I ecolabel is the most reliable and credible because independent organizations issue it, its criteria are established and generally agreed upon by multiple governing bodies. For example, the Forest Stewardship Council is an organization that gives Type I ecolabels. They certify sustainably sourced wood and paper products.

2. Type II: Voluntary or self-declaration labels

Type II ecolabels are self-declared environmental claims made by manufacturers or service providers. These certifications often rely on the company’s honesty and transparency on the environmental performance of its products or services rather than obligatory third-party verification.

Companies using self-declaration labels typically focus on a narrow aspect of sustainability. For example, they tend to use phrases such as “recyclable,” “biodegradable,” and “compostable.”

3. Type III: Environmental declarations

Type III ecolabels are like the report cards of the product or service. They can be used to publicly release comprehensive information about a product or service’s lifecycle and compare that product or service against international standards and guidelines. Based on this comparison, the company can include the respective ecolabel on their items.

Companies that want to make environmental declarations often use the criteria of the Global Reporting Initiative. Type III is less expensive, but it’s also more labor-intensive. It requires companies to do their own research and compare themselves to international standards.

The Objectives of Ecolabeling

Consumers can use ecolabeling to make informed decisions about the products and services they buy. It allows customers to reduce the environmental impact of their purchases by promoting sustainable production and consumption practices.

• Consumer protection and education

Ecolabels help consumers make informed and sustainable purchasing decisions by providing information on what they’re buying. Knowing the composition of a product and its production process can help them reduce their environmental impact from product choice alone.

Ecolabels promote CSR by encouraging businesses to adopt ethical and sustainable business practices. By obtaining ecolabel certifications, companies demonstrate their commitment to social and environmental responsibility, which can improve their reputation and brand image.

• Innovation encouragement

Ecolabels can increase the demand for environmentally friendly goods and services, leading to the development of more sustainable production methods. Companies can find alternative power sources for production, leading to new industry standards and techniques.

• Market transformation

Ecolabels can transform the market by creating a demand for sustainable products and encouraging businesses to adopt sustainable practices to remain competitive. This shift can lead to a more sustainable economy with a reduced environmental impact.

Ecolabeling: The Pros and Cons

Despite its lofty goals, ecolabeling has some drawbacks that proponents must overcome to achieve its full potential.

1. Pro: Consumer awareness | Con: Greenwashing and misleading labels

Ecolabels are a way for companies to tell the world what they’re doing to care for the environment. It’s an excellent method to get more information on the practices of the companies consumers are buying from.

That way, customers can support companies that align with their beliefs and help them grow. Credible ecolabels can give customers at-a-glance information about a product’s environmental impact.

Many different ecolabels are available, but customers can’t trust all. Some companies make false, misleading, or exaggerated claims about their environmental compliance to take advantage of the practice, which is called greenwashing.

For example, a company can technically claim its plastic products are biodegradable because plastic degrades over time. It just takes hundreds of years for plastics to decompose.

Bad faith claims such as the one above can damage the credibility of all ecolabels and confuse or dissuade customers from practicing their agency.

2. Pro: Customer attraction | Con: Lack of standardization

Businesses can attract the attention of environmentally conscious customers by using ecolabels. Their sustainable practices can help drive sales, promoting further market changes and increasing demand.

However, the need for standardized criteria and recognizable markings limits the impact of ecolabeling on customers. More companies adopting Type I ecolabels can improve their marketing impact for all participants.

3. Pro: Corporate monitoring | Con: Basis for price markup

Participating in a Type I ecolabeling program is a wonderful method to demonstrate to your clients that you’re serious about sustainability.

Ecolabels allow organizations to closely monitor participating businesses and corporations, which can help improve public trust in companies that voluntarily undergo scrutiny. It will enable them to receive more sales and raise prices to compensate for the inspection costs.

Unfortunately, it might also be a scam because some companies think they can get away with marking up their prices by including false claims on their product packaging. These businesses didn’t have to change their processes or spend any money to get the benefits of Type I certification.

4. Pro: Avenue for competition | Con: Inaccessibility

Businesses can stand out from competitors by using sustainable packaging. Regarding deciding which brand to buy, 54% of consumers read about companies’ sustainability efforts before choosing.

While eco-marketing has many benefits, it can be difficult for smaller businesses. For instance, Type I ecolabels are prohibitively expensive for some companies to acquire. They may also not have the resources necessary to make an environmental claim.

The eco-marketing industry is a field that’s rarely accessible to companies who can’t afford to acquire reliable ecolabels. It can force them to give up or resort to greenwashing to remain competitive.

5. Pro: Incentive for sustainability | Con: Tracking difficulty

Although difficult to trace, ecolabels can be useful for encouraging businesses and consumers to be more sustainable. While it’s true that many factors can influence purchasing decisions—price, quality, and convenience—it’s nearly impossible to claim that a shift in buying patterns is solely because of ecolabels.

Proving the efficacy of ecolabeling is crucial for convincing more businesses to adopt sustainability practices, so find quantifiable methods for tracking their effect on sales.

Applications of Ecolabeling: 5 Tips

Ecolabels can be a valuable part of a product’s label, helping to promote a company’s sustainability efforts. To be effective, they must be developed and applied following best practices and guidelines.

1. Define the purpose and scope

The purpose and scope of a campaign are the foundation of a successful ecolabeling program. Clearly defining the objectives of the ecolabeling campaign ensures that the program effectively achieves its intended goals. A well-defined purpose and scope also help avoid confusion and misinterpretation of a business’s objectives.

Trustworthy ecolabeling programs have clear, measurable environmental and social standards. These criteria should be based on scientific evidence and consider stakeholder input to ensure they’re relevant and applicable. They help improve customer comprehension and make them feel included.

3. Set achievable targets

A company’s target for an ecolabel should be challenging but not impossible. If a business fails to meet this goal, it can counteract the benefits an ecolabel provides. It’s also essential to regularly review and update these goals to ensure they remain relevant.

4. Ensure transparency and disclosure

Transparency is a critical component of a successful ecolabeling application. Without it, customers can’t understand your ecolabel’s criteria, verification processes, limitations, and qualifications. Transparency also helps businesses achieve their targets, thanks to the support given by customers.

5. Educate and raise awareness

The most strict and demanding ecolabeling certification goes to waste if the customers don’t understand what they’re looking at. To ensure that your customers get the most out of the ecolabel, you must educate them on how to interpret it and appreciate its significance. For example, articles announcing the acquisition of an ecolabel can help boost understanding.

Ecolabeling Done Right

Businesses need creative solutions to stay competitive in a very cutthroat market. Vibrant labels with bold fonts can help your products stand out, but ecolabels provide the distinct assurance of experts when applied correctly.

If you want a competitive advantage that incorporates sustainability, consider partnering with Meyers! We provide custom pressure sensitive labels, retail product packaging, and other packaging solutions of superior quality while minimizing environmental impact. Contact our packaging experts today to create a tailored response for your packaging needs.