November 16, 2011, London, Washington DC – A new report concludes that today’s sustainability labels cannot deliver sufficient business value or drive the level of consumer demand we need to transition to a sustainable economy.
Signed, Sealed… Delivered? assesses the value and challenges that businesses find in using certification and labeling to improve economic, environmental and social outcomes across global value chains. The report uncovers a number of problems that businesses experience with the current model.
“The time has come to reassess how businesses both deliver and demonstrate how we can support thriving communities in our supply chains,” says Ben Packard, VP of Global Responsibility at Starbucks. “The trick for all of us is to figure out how we do it in a way that creates value to suppliers, operates at scale and creates meaningful connections for consumers.”
Labels – and the standards-setting organizations behind them – have set a crucial foundation for advancing more sustainable business practices. But the mass proliferation in the marketplace – 400 and counting – and the move to mainstream for many, is significantly reducing their value. Additionally, it is proving impossible to achieve the scale of change required. Signs of nearing limits include:
- Diminishing returns for business: Fairtrade-branded chocolate bars in the UK have now become the norm, so the label is no longer a differentiator.
- Failure to attract attention: Labels tend to be seen and acted upon only by informed consumers who are actively looking for a mark, so fail to influence the majority.
“The archetypal label – combining consensus-based standards with an independent assurance process and an on-pack mark – was a brilliant initiative for its time, but it has now reached its sell-by date,” according to Patrin Watanatada, lead author of the report. “Labels now need to fade into the background, acting as trust marks for those who seek them and leaving brands to delight and mobilize consumers into adopting more sustainable behaviors.”
Signed, Sealed…Delivered? sets out a vision for a future where brands and retailers no longer rely on third-party labels to drive consumer demand for more sustainable products.
The report recommends a shift towards a new model, where companies collaborate on developing and adhering to increasingly demanding pre-competitive standards, but compete to embed these standards into business models and to leverage their marketing know-how to generate demand and shape a more sustainable market.