Are There Too Many Ecolabels?

Every day, each and every one of us is faced with an overwhelming number of choices. From when we wake up in the morning until we go to bed, we make hundreds of decisions among the thousands of choices we have. Grocery stores now carry over 30,000 unique products and many big box retailers carry over 100,000. And as a society, we love choices. In fact, the United States was founded on individuals’ autonomy to choose, dating back to the Declaration of Independence.

But having so many choices isn’t always good for us. Thomas Jefferson’s declaration of our inalienable right to liberty has gotten a bit out of control. We spend a large amount of our time making irrelevant and unimportant decisions. Such complex decision making causes stress, anxiety and self-doubt.

When faced with the choice of 300 different types of cookies in the store aisle, whether I choose to buy Chips Ahoy or Oreos will have no impact on my well-being, but yet I still spend three minutes agonizing over each package.

Likewise, we face a similar conundrum with ecolabels. With over 300 ecolabels and many more being added each year, consumers and businesses have to make increasingly complex and convoluted decisions. Manufacturers must weigh many different factors when making their choice of what ecolabels to get for their products, including cost, ROI, and credibility of the label.

Businesses of all types must decide what, if any, ecolabels they trust for purchasing. In the business world, especially at product companies, managing sustainability certifications, standards and labels requires at least a full-time position.

But businesses have an easier decision-making process than consumers. Businesses make a significant financial investment in choosing the “correct” ecolabel(s) and therefore spend time evaluating their myriad of options, weighing the pros and cons, and meeting with the various certification organizations to hear why their program is better than the others.

Consumers only have the luxury of a few seconds to make their choice while in a store aisle. Although mobile technology now makes it easier to access information anywhere, an ordinary consumer in the store aisle isn’t going to spend thirty minutes evaluating cleaning products with three different certification labels to learn which one is best.

A small percentage of consumers are willing to dig into the details and do their research to decide which one is better for them, but most consumers that are willing to make a purchasing decision based on sustainability just want one recommendation on what they should buy. That is why Energy Star has been so successful in the consumer market; one authoritative body provides a simple way to make a choice.

By no means am I advocating for the elimination of all ecolabels and development a system with one choice. That would be even more disastrous. A competitive market is necessary in order to keep raising the bar on all ecolabels in the market. Having various programs compete on transparency, rigor, credibility, service and price, ensure all stakeholders receive maximum value from the market.

What we need is an oligopoly with larger barriers to entry. A handful of credible certification programs, labels and rating systems to dominate the market. This will minimize consumer confusion while working to ensure labels and ratings are held to high standards. Despite the hundreds of ecolabels that exist, this scenario isn’t actually too far from where we are now.

While there may be hundreds of labels, any given decision requires no more than a few choices. Ecolabels are segmented by product category, industry or geography. When I go to buy paper, or glass cleaner, or seafood in the supermarket, I’m not choosing among hundreds of ecolabels, I’m choosing among a small subset for each of my decisions.

And while there are more and more ecolabels being introduced by many different organizations, from nonprofits to retailers, there is also consolidation starting to happen. UL recently acquired the Canadian certification program TerraChoice. In the past year we have also seen considerable consolidation in the SRI industry, with MSCI ultimately swooping up RiskMetrics, KLD, and Innovest.

There is little doubt that the sustainability labeling and ratings space may now be heading down a path of further collaboration and consolidation. Consumers will continue to become more concerned with the products they buy, businesses will invest more in green marketing to communicate with their customers, and credible labeling and ratings schemes will continue to grow as a key aspect in all product purchasing decisions.

About Josh Saunders

Joshua is a nationally recognized expert on sustainable products, green business strategy, and environmental marketing. As Senior Director of Business Development for GoodGuide, Joshua is responsible for partnerships, alliances and commercial sales and marketing operations. Joshua has worked closely with a variety of environmental standard setting, eco-labeling, and certification programs across a wide range of industries from electronics to building products. Prior to his current role, Joshua held several positions within the sustainability and certification industry. As Global Operations Manager, Joshua helped start and establish UL Environment, a subsidiary of Underwriters Laboratories that focused on sustainable product certification. He has been heavily involved in many sustainability initiatives, including participating in roundtables with the National Academies of Science and the Keystone Center. Joshua holds a Bachelors degree in Electrical and Computer Engineering and a Master of Business Administration in Finance and Entrepreneurship.
This entry was posted in Home and tagged , , . Bookmark the permalink.

2 Responses to Are There Too Many Ecolabels?

  1. ANSHUL GUPTA says:

    ost written by Anshul Gupta. Follow me on twitter.

    Are we being fooled by large number of choices that we face today? Andy Andrews; an inspirational author and speaker, once said, "The greatest power ever bestowed upon mankind is the power of choice. Choose to persist without exception. Hold fast to your dreams and stay the course, even in the face of exhaustion, rejection, and uncertainty." But that same power of choice is weakening us today while we consider our decision making abilities. Because we no longer have requisite number of choices, instead we have what I call flooding of choices….

    For example, we know that in reality there is no scientific difference between Coke and Pepsi, but we tend to perceive them as different. We have so many choices in so many fields that it has now become a major cause of bad decision making. See the video (below) and this point would become more clearhttp://www.ted.com/talks/view/id/924

    -anshul
    http://ideas8bottom.blogspot.com

  2. William Rosenzweig says:

    Joshua, Dara,
    How are you thinking about integrating eco labels with equity (fair trade) and health? Is there a pathway to certifying companies and products that attain an integrated "sustainable" approach metric that encompasses the three dimensions that GG measures? Also, what are your thoughts about these complicated "labels" moving to the digital realm where they can be accessed on mobile phones, rather than take up lots of space on precious package real estate?

Comments are closed.