Environmental Labelling - Environmental Audit Committee Contents


One of the most powerful ways in which individuals can bring about social and environmental change is through ethical consumer choice. This often achieves changes in corporate policy faster and more efficiently than government regulation or legislation. Consumer choice requires the consumer to be able to discriminate between products and services and labels have been an important influence on consumer behaviour, strongly influencing markets as diverse as white goods, paper and dairy products and helping to create whole niche markets for fairly traded and organic goods.

But its very effectiveness also makes consumer information labelling attractive in marketing terms to retailers and producers and there is a risk of proliferating labels of uncertain quality undermining consumer understanding and confidence. To be effective, labels need to be as universal as possible and they need to be backed up by systems for audit and accreditation that will ensure the claims manufacturers make about their products can be verified.

The Government needs to put more resources into promoting better environmental labelling and push harder on setting the standards and parameters for labelling schemes. As in the white goods market, environmental labels are particularly effective when consumers do not have to pay a premium for higher standards. The Government should examine the scope for strengthening the effectiveness of other labelling schemes through fiscal measures.

Although the best are clear and self-explanatory, labels are more likely to influence a purchasing decision if the customer has prior awareness and understanding of the label. The Government must help to promote and explain environmental labels actively to consumers, using publicity and advertising to raise their awareness and understanding before they make decisions on purchases. The Government should require certification schemes to make public information explaining the structures, standards and methods behind the label, ensuring that consumers can have confidence in the audit and inspection processes that underpin the claims a label makes. The Government should also set standards and guidelines for the levels and categories of information to be provided by any business that seeks to promote its operations and products through a third-party labelling scheme. More must be done to ensure information in support to labels is made available to consumers both prior to purchase and at the point of sale.

There is a growing problem with greenwash—the use of insubstantial or meaningless environmental claims to promote a product. The Government has a role to play in policing the use of environmental labels and intervening directly to remove those found to be inaccurate or misleading.

In many ways, environmental labelling's real potential lies not in changing consumer behaviour, but in changing business behaviour and thereby improving the sustainability of the manufacturing process and the products available to the consumer. In improving the overall environmental performance of the economy, the Government must work more closely with business to increase take up and to ensure labels are used correctly for the sectors and product groups identified as priority areas. In order to do this effectively, labels should be underpinned by proper systems for analysis, audit and accreditation.

Carbon labelling is crucially important. It cannot account for all environmental impacts or be a universal environmental label. But the value of the carbon label will be increasingly important as consumers' awareness and knowledge of embedded carbon grows. Embedded carbon labelling is a form of environmental label that can be applied to all products and all sectors, and, given the nature of the challenge we face in decarbonising the economy, may be the single most important one. The ideal would be for industry and services collectively to agree a credible and verifiable environmental labelling scheme that meets the requirements of informed consumer choice. But as in the case of food labelling, it may be that the best and clearest label allowing the easiest consumer choice has to be developed by a statutory agency and the Government will in due course have to consider the need to legislate for a sector-based universal labelling scheme. Indeed there is a strong argument for environmental and indeed ethical labelling to build on the lead given by the Food Standards Agency with their 'traffic light' approach and for government to expand this established and well-understood way of communicating with consumers into other areas. Above all, the Government should support clarity, simplicity and consistency in labelling.

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Prepared 23 March 2009