Analysis

How Consumers Deal with Sustainability Standards and Eco-labels (Dec 2011)

Dec 2011

In the 1980s and 90s, many eco, ethical, organic and social labels appeared in an attempt to capitalize on consumer demand for such products.   The promise of a consumer society making purchasing choices on a wide scale based on these voluntary standards never materialized, largely due to consumer confusion over the wide array of standards dealing with different products, countries and issues.  In the 2000’s the use of sustainability standards by the B2B supply chain emerged as a key trend, with consumer eco-labels, with a few exceptions such as Fairtrade, FSC and some others declining in brand recognition.

 

An interesting start-up emerging to fill this gap is Goodguide, a US venture founded in 2007.  It provides a directory of 145,000 products (food, toys, personal care, & household products) and claims to allow consumers to learn about “to easily learn about the best and worst products in a category” and “simplify complex and confusing product information” on environmental, safety and ethical issues.  The company employs scientific methods to evaluate chemical, pollution and other risks posed by the products, with the output being a simple comparative rating on a scale of 0 to 10.  The system is designed to help consumers tell the “difference between 'good companies' and good marketing.  The role of Goodguide is to do the technical work for the consumer and offer a comparative choice between different brands and products in similar categories.  This is a glaring gap in the use of eco-labels that tend to be binary in nature (i.e. the product either has it or it does not) with the detailed assessment criteria often confusing to the consumer.  The site has proved hugely popular in the last few years (it is a top 100 Website in the US) with Goodguide ratings appearing in leading retail chains such as Walmart.  An iphone app allows scanning of the bar code of a product in the store to draw up the Goodguide score.  In another development a new iphone app allows consumers to decipher eco-label data. 

 

Goodguide states that certification to standards provides one input to its evaluation, with the weighting applied to these certifications depending on the product category.  It is clear, however, that disparate consumer eco labels dealing with single issues or products may not be the answer in the long term with certain exceptions (where a single issue is very, very critical to a sector’s public image, such as child labor with sports shoes or ethical trade with coffee/bananas).

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