Sustainability labels should focus more on actual company performance

When we talk about the “eco-label model” we’re really talking about a combination of three things.

First, standards – a set of requirements, usually taking a consensus-based approach. Second, certifications – providing assurance of conformity against this standard. And, third, the eco-labels themselves – on-pack marks that indicate conformance with the standard.

This model came into being over 30 years ago, and, surprisingly, has changed very little in that time.

Pioneers

And until now, it could be argued, little change was needed. Certification, labelling and the standards-setting organisations behind them have been pioneers in building a more sustainable economy.

For businesses, they provide a credible reference point for collective action, access to expertise and networks, and can spur demand for certified or labelled goods.

But the mass proliferation of eco-labels in the marketplace – 400 and counting – and the move to mainstream for many (thus removing their value as a differentiator) is significantly reducing their value.

Couple with that the fact that the model itself – based on consensus and inclusiveness – is posing challenges for businesses seeking to take leadership positions in the marketplace.

Embedding sustainability

The time has come to rethink the eco-label model. Certification and labelling are time and money intensive; we can’t – we shouldn’t – certify and label everything. The aim behind certifications and the aspiration beyond labels is the creation of organisations and market systems that are just and sustainable in their entirety.

Rather than certifications and labels driving endless incremental improvement, it would be preferable if the future was built on increasingly rigorous, pre-competitive standards for sustainability performance, above which brands compete to make sustainability intrinsic to their mission and products. 

In this future new business models will emerge whose DNA will embed factors previously requiring certification, and civil society will find more effective and efficient ways of holding business accountable.

A new direction?

There is evidence that such change is underway. Different types of certification are emerging.

Greenpeace has verified Nestlé’s commitment to no deforestation. The Better Cotton Initiative standard sets a base level sustainability standard for more sustainable cotton, but is not consumer facing.

And as a marketing tool, some companies have opted to use labels as a “back of pack” mechanism to complement the brand. For example, Method uses Cradle to Cradle certification as a design tool, which matches the brand’s design focus.

Outcomes not standards

In the future there is opportunity for businesses innovate to deliver outcomes rather than standards, complement certification with strong supplier-buyer relationships, and use the power of their brands to delight and mobilise consumers into adopting more sustainable behaviour.

In turn, standards organisations can stretch and innovate alongside business, certification will be complemented by new mechanisms such as partnerships and national regulation, and labels will fade into a quieter, background role, acting as trust marks for those who seek them, and leaving brands – and consumers themselves – to take the lead.

Heather Mak is a manager at SustainAbility. She is co-author of Signed, Sealed … Delivered?, SustainAbility’s new report on labelling.