Can You Define Sustainability?

Eco Labels Losing Their Luster

Has eco labeling reached its maturity? 

Ask ten individuals to explain sustainability and you are likely to hear ten different descriptions.  One person might mention clean water, single use plastics and packaging innovations. Another might bring up energy usage, product life cycles, and supply chains. Still another might speak specifically about agriculture, food, soil and biodiversity. Each explanation can fall under the great umbrella buzzword; sustainability. Each one of those explanations also comes with its own metrics for success and of course, a unique label to feature on the made of recycled material or compostable box it comes in.

Sustainability 101 gives us a pretty simple formula: don’t use more than you can replace. Don’t cut down trees at a faster rate than they grow back to support your need and don’t use more water than can realistically be replenished over a specific period of time. When a process creates a long term impact, positive or negative, then the implications of that impact must be considered; typically from an economic, environmental, and social perspective. 

If we can meet a need now without creating problems for future generations to meet their needs then we have succeeded in achieving sustainability. In theory, labels should make it easy to communicate success. If legislation sets a standard, then a logo could communicate that standard has been met. If a company has made an effort to reduce chemical usage, provide extra staff support, or repurpose waste, then a familiar label connects the producer with the consumer who shares the same value.

A Consumer Perspective on Sustainability

Numerous polls have been conducted on consumer perception of sustainability and the effectiveness of eco labels as communication tools. Do people care how their goods were produced, how far they traveled and the impact they have on environments, economies and communities across the globe? As it turns out, they do. More than 60% of Americans consider sustainability factors when making a purchase and are willing to spend more money on something they believe has minimal negative impacts.

On the production side, companies statistically see an increase in profits if they are able to claim some type of sustainable practice. In the last decade profit increases have been as much as 35%. Even if they cost a company something to acquire the certificate or make the sustainable shifts, studies show customer loyalty also increases when they perceive a company as sustainably minded. Consumer awareness has led to spending shifts which has prompted companies to revamp business plans resulting in an eco-label boom.

The Eco Label Boom

Globally, there are 456 eco labels a product can receive and 202 of them are U.S. certifications. There are coffee, construction material, produce and cosmetic specific labels. There are fair trade labels, environmentally friendly labels, energy efficient labels and animal welfare labels. Companies can point to their packaging material, their ingredient sourcing partners, the working conditions of employees and their emissions across a supply chain to attract sustainability minded consumers. If you’re doing something great for the environment, wonderful! And if your company has managed to reduce negative impacts like waste, unsafe working conditions, or pollution, that's great too.  It can all earn your favor in the eyes of the consumer.  In fact, if you can’t claim some sort of sustainable focus it has gotten difficult to stay competitive.

The United Nations has a list of 17 sustainable goals to assist businesses in building their own strategic plan. On their list you will find clean air and water, climate smart initiatives and clean energy initiatives. But, you will also find poverty and affordability, education and infrastructure.  There is a sense of urgency around the world to be sustainable that comes from consumers spending as much as it does from legislation and the glaring reality of how fragile some supply chains are thanks to Covid-19.

The Greenwashing Problem

As sustainability definitions have grown and expanded consumers appear to be more skeptical. If a company has no feasible way to improve their waste management but contributes money to clean energy innovation, are they sustainable? And if another company’s fashion line pollutes water, but the product is delivered in a biodegradable package, are they sustainable?  Or, as we’ve already seen, can a company change nothing about their process and simply claim that the plastic they are using would have otherwise ended up in the ocean?  Consumers are starting to wonder.

Over 40% of the claims companies make about sustainable practices are exaggerated according to the European Commission.  Of 344 sustainability claims investigated 37% used vague and therefore misleading language and 59% offered no means of verifying the claims at all.  In the haste to make the sale now by jumping on the sustainability train some companies may have set themselves back a few steps with consumers. In North America, the Anti Greenwashing Charter aims to enforce stricter regulations for eco labeling that provide consumers with clarity and include access to a method of verification.

The future of Eco Labels

With consumers now calling out more companies on their marketing strategies, the eco label boom could slow. Beyond proving that they have made sustainable shifts of some type, companies now need to prove that they are continuing to uphold their claims on a regular basis while still chipping away at sustainability in new areas. Brands are starting to consider communication tools beyond labels and logos. Interactive traceability tools, emissions disclaimers and third party verifications will likely be the next trends in packaging communication strategies.

Though consumers are increasingly skeptical of eco labeling and looking for greenwashing tactics, 60% still enjoy knowing that their purchases didn’t contribute to deforestation, air pollution and poor working conditions. Eco labels may be reaching their maturity as consumers demand clarity over the addition of more labels that add to purchasing confusion. They actually want to know what makes a beef steak “all natural,”  how a farm operates to maintain organic certifications, and where the zero waste packaging materials were sourced. Future sales may go to the most transparent brands.