This is the first post of the ecolabels series. In this series, we explore what ecolabels are sustainability standards are, how they work and how understanding them can make you a responsible consumer.
These ecolabels are common on consumer goods today and come with an assurance of environmental and social protection. But there were no such labels or standards till the 1980s. How did ecolabels emerge? And why, within just a few decades, did they become almost a necessity in the world market? Here’s a short version of this fascinating story.
The first demands
The history of sustainability standards can be traced back to early public demand for ethical production in the late nineteenth century. After decades of exploitation, Europeans began to realize the horrendous conditions of the colonies. Among the first to develop this feeling of guilt were the Dutch, who were horrified after hearing about the condition of the workers in their Indonesian coffee plantations. As Evan Fraser and Andrew Rimas write in their book “Empires of Food: Feast, Famine and the Rise and Fall of Civilization”, “In the centuries since their free-booting ancestors had carved out a foreign empire, the Dutch had grown a delicate social conscience. They didn’t like to hear that their government was enslaving anyone.” A Dutch administrator, Eduard Douwes Dekkar, narrated the plight of the plantation workers in all its gory detail in his 1860 book “Max Havelaar” or “The Coffee Auctions of the Dutch Trading Empire”. The reaction that followed the release of this book in the Netherlands led to various social initiatives by the Dutch government for the colonies: education, banking, and infrastructure.
This effort did not last long. Two World Wars and an economic depression saw to that.
The post-war era: the rise of sustainability standards
The debate about sustainability and ethical standards was stoked again during the 1980s. The world was opening up to free trade. Cheap production of goods in the Global South and its consumption in rich nations were touted as the ultimate solution to economic crises. A rising tide would lift all boats, would it not? Everyone, including the poor and oppressed of the former colonies, would benefit.
Activists and environmentalists were wary of the environmental and social damage of this “solution”. It was but human nature to let greed take over, they argued, and it would cause blatant over-exploitation of natural resources and workers to increase profits.
A solution appeared in the form of sustainability standards and ecolabels.
How sustainability standards and ecolabels work
A sustainability standard provides a list of specifications on how a product must be produced, emphasizing on avoiding environmental and social harm. Any producer who implements the specifications may display a label—an ecolabel—on their product so they can be recognized for their compliance with the standard.
Standards are like the training regime you follow. Ecolabel is the medal you get for completing the regime so you can show the world!
(Read on to find the correct answer!)
One of the first sustainability standards for ethics was the Fair Trade standard of the Dutch in the 1980s, who developed it with Mexican coffee growers. This standard emphasized ethical sourcing. This was how it was supposed to work: Say Monica, living in London, wants buy a packet of coffee. She walks into a shop and look at two coffee packets – one with the Fair Trade ecolabel and one without. If she cared about supporting ethical farm practices and wanted to help improve the living conditions in Mexican coffee farms, she could choose the Fair Trade coffee. The money that she just spent to buy this coffee – even if slightly more expensive – would go towards improving workers’ lives.
Sustainability standards became quickly important in the forest products category. One of the biggest concerns during the 80s and 90s was the massive degradation of natural forests. Many felt that a global consensus on sustainable forest management would be reached in the 1992 Rio Summit, and were disappointed. So, they took matters into their own hands. A multi-stakeholder partnership between NGOs and concerned industrialists developed the first sustainable forest management standard called the Forest Stewardship Council (FSC) in 1993.
The first ever standard and ecolabel, though, was the Blue Angel. Released by the German government in 1978, the label is awarded to various products and services that are deemed environment-friendly by an independent panel of relevant stakeholders. (Environmental experts, trade union representatives, NGOs, etc.)
Within a couple of decades, standards (and their ecolabels) became a novel tool to reach conscious consumers in global markets, and – most importantly – avoid environmental and social destruction.
Standards and ecolabels today…
The concept has been keenly adopted by producers who want to target niche consumers and build a reputation as a responsible producer. Both the consumer and the producer benefit: the consumer has the satisfaction of supporting responsible sourcing/production and the producer earns a premium on their certified products that allows them (in theory) to invest in social and environmental development.
Market regulators and governments have also embraced standards and ecolabels. Access to such markets depend not on the price of your product, but on the presence of an ecolabel on the cover. The most notable of these markets is the European Union.
Can YOU make standards better?
The remarkable achievement of this concept remains for all to see: standards have brought the conversation of ethical sourcing and environmental sustainability in what was otherwise a profit-making juggernaut. This is revolutionary and has benefited millions in the world.
There are, certainly, enormous challenges in using standards: the strictness of a standard, problems of scale, greenwashing, compliance costs and efficiency of transfer of benefits to the farmer/worker. The fight to solve – or at least reduce – these problems continue today. That fight is also in your hands. As a consumer, you have the power to arm yourself with the right information and choose products certified by genuine standards. Consider starting with your cup of coffee?
The article is extremely informative. Labels hardly caught my attention until now 🙂
I have a question though.. Going by the Rational Choice Theory, I feel not a lot of consumers would buy Fair Trade Coffee due to its higher price until it is directly benefiting them. Some exceptional consumers would purchase it due to social awareness of course. Assuming such a case, how does the producer keep production running and is the producer able to maintain fair standards while in loss?
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Thank you Sukriti!
I agree with your thought. This has been one of the biggest challenges for sustainability standards. In a price-conscious market (like India), consumers may choose to go for the least expensive option unless they are exceptional consumers. Many producers have opted out of these standards because of this reason; compliance is too costly without the financial returns.
However, specific markets (like the EU) make it mandatory to comply with some or the other standard. A producer selling here will definitely fair returns for their effort.
There are also many producers who comply with these standards and rigorously market their product to the right customer base; they demand a fair (sometimes more than fair) price for their product.
At the end of the day, it depends on where the producer sells and who he/she targets.
To simplify, we need to strike a balance somewhere. We cannot keep exploiting the world around us and expect rewards. As a consumer. we have enough power to shift global trends and markets.
That is the key message, Nikita. Our choices as a consumer have the ability to positively impact so many things. We need to take that call to be responsible.
Thank you for your comment!
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Eco-labels and sustainability. It’s not a topic that I have come across. Well done!
Thank you so much 🙂
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I am currently undertaking my dissertation research surrounding the success of ecolabelling strategies for both producer and consumer. Do you think the positives for both parties outweigh the negatives and possible loopholes the initiative carries with it? And do you think this initiative will remain relevant long-term, or is it just a false reality to aid a consumer’s guilty conscience?
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Interesting questions, Katherine.
I think that overall, the positives do outweigh the negatives. Our economic system has been notorious for not accounting for “externalities”, but the certificate system has given us a way to account for it and monitor it. This is important and takes us forward from our old view of “getting things for free from nature”. The sustainable practices under certification and ecolabels are good for ecosystems and the immediate society around it, if they are properly crafted and implemented. The loopholes are found/created by people who don’t want to take on the responsibility of externalities.
I think this initiative will remain relevant long-term. But maybe not in the same form as it is today. For example, ecolabels carry a premium price that attracts producers to follow the standards. But if everyone follows the standards and the market gets dominated by ecolabels, the premium might disappear or reduce. We’ll have to find a different way to maintain the price advantage, if that is indeed a strong motivator for producers to adopt ecolabels.
The other concern is scale. If all the production happened under sustainable practices, we may not be able to produce the same amount of goods we do now. If products become scarce at the cost of sustainability, there may be backlash and the certification system will have to adapt to circumvent this. (Although that shouldn’t be a concern really, since a large proportion of our produce is wasted. For example, 1/3 of all food produced is simply wasted. If we improve the efficiency of our supply chains, then we may easily meet demands even under a lower production volume.)
I am not a big fan of appealing to a consumer’s guilt, and that shouldn’t be the way ecolabels and sustainable products are marketed according to me. The negative perceptions around guilt might make people avoid these products, or find ways to discreetly cheat them. “Responsibility” towards our ecosystems and our producers is a more positive emotion, one that I think will remove all notions of “false-ness”.
I hope this helps in your research and I’m happy to discuss this further 🙂 all the best!