Eco-labels: Give up and get lost

The substantial scepticism amongst the corporations of eco-labels’ enduring credibility and rigour of criteria and certification procedures leading to a costly and highly bureaucratic process almost outweigh the benefits of brand-strengthening, addressing consumers’ sustainability demands and protecting against pressure-group attacks. While revealing the extent of the corporations’ mounting frustration, IMD rhetorically asks: Have eco-labels had their day?

Thirty years down the road of eco-labels, 400 labels are in use covering 250 countries and 25 industries – and while the resistance is understandable, it’s a one way street and just the beginning. Eco-labels is not a goal, but a tiny tool of a powerful movement. The same frustration existed when new concepts such as “Quality” was introduced, which eventually led to widespread adoption of Total Quality Management.

Factors such as image, non-financial performance and regulation (perhaps the biggest motivator) will nudge companies in the sustainability direction – but this is a movement of extreme dimensions and goes far beyond. It is a state in which:

1. Employees in an organization realize the importance of sustainable business practices and make decisions while coordinating with relevant stakeholders. The key future challenge for sustainability engagement. Realization of top level strategies comes when companies – small, medium, or corporate – build enduring organizational cultures of sustainability where all employees are highly engaged as change leaders in the formulation and implementation of sustainability initiatives.

2. Businesses, governments, and other stakeholders across the supply and value chain co-create policies that promote sustainable growth.

It’s time to think how the value proposition of sustainability can be communicated so that it becomes a cultural norm or policy within businesses – and eco-label is one of your important tools in that respect.