Sustainability Labels Research Articles

The influence of climate change knowledge on consumer valuation of sustainably produced rice in Vietnam

Rice production in Vietnam is characterized by environmental degradation, high greenhouse gas emissions, and low wage rates. The Sustainable Rice Platform (SRP) standard is the first globally recognized certified sustainable production standard for rice. There are efforts to increase sustainability in rice production, but little is known about consumer perception of sustainability labels. This study investigates the relationship between climate change knowledge and consumer willingness to pay for SRP-certified rice in Vietnamese supermarkets. The results show that consumers are willing to pay on average a 29% price premium for SRP-labelled rice. Increased knowledge about climate change and higher income positively influence the amount consumers are willing to pay. The results have policy and market implications for scaling production and consumption of rice complying with certified sustainable production standards in Vietnam.

The sustainability halo effect: Does the provision of sustainability information of a snack affect sensory and health perception, and willingness to pay?

The ecological impact of food production can be mitigated by reducing the amount of food losses. Whilst some novel products target this problem area, little is known about consumer perception of such products. Research has shown that sustainability labels can impact consumer taste and health perception. This study investigates the impact of product information on consumer perception in a snack tasting. A novel snack consisting of food production by-products was offered to participants under two different conditions: without any information and with information about the sustainability of the snack due to its potential to reduce food losses. While there were no significant differences in the perception of the snack when comparing means between the two study conditions, a three-way MANOVA showed significant effects of study condition, gender, or environmental consciousness on perceived saltiness, odor, willingness to pay, and health perception. The results of the study are ambiguous. This could be due to the sample size, study design, or the snack. Further research with different products and more standardised study conditions is needed to better understand consumer perceptions of products that use by-products to reduce food losses. Results of the recent study are beneficial to estimate effect sizes for future studies.

Wine consumers' demand for social sustainability labeling: Evidence for the fair labor claim

AbstractThis study aims to investigate consumer preferences for social sustainability labeling for wine. We explored the potential demand for a fair labor label that certifies wine produced through the fair treatment of workers in Italy, since the exploitation of migrant labor has become a preeminent issue in the country. We conducted a choice experiment on a sample of 500 consumers. Results indicated that they were willing to pay a considerable premium for wine produced by wineries that respects workers' rights and that there is a wide heterogeneity in consumer preferences for sustainability labeling according to the different dimensions underlying the label.

The effects of values and information on the willingness to pay for sustainability credence attributes for coffee

AbstractThis research estimates consumers’ willingness to pay (WTP) for coffee labeled for sustainability credence attributes using non‐hypothetical experimental auctions. We examined consumers’ WTP for Fair Trade, USDA Organic, Rainforest Alliance, Direct Trade, and a combination of Fair Trade and USDA Organic labels on coffee. Additionally, we investigated the underlying motivations of WTP for sustainable coffee. Specifically, we focused on altruistic, egoistic, and biospheric value orientation, and the warm glow effect. Our results indicate that consumers are willing to pay a premium of $2.57 for a 12oz coffee bag labeled for both, Fair Trade and USDA Organic, $2.04 for USDA Organic, $1.79 for Fair Trade, $1.96 for Rainforest Alliance, and $1.71 for Direct Trade. We also find that consumers react positively to information about the labels’ claims, increasing the premium by approximately 55% for Rainforest Alliance coffee and 72% for Fair Trade coffee. Although some consumers exclusively pursue their self‐interest and do not care about social goals “per se”, this does not hold for everyone. Our study demonstrates that the warm glow effect on consumers that like coffee influences bids for coffee that carries sustainability labels.

The impact of knowledge on labeling schemes promoting sustainable investing

AbstractSustainable labeling schemes are frequently used to simplify decisions for consumers, for example, in financial contexts, and to subsequently promote sustainable investments. The purpose of this research is to, against the backdrop of dual processing theories, outline consumer reactions to sustainability‐oriented investment labels. Experimental results from a representative sample show that objective labels are perceived more favorably by financially knowledgeable individuals. Three developed and validated scales, measuring general and specific financial knowledge as well as environmental knowledge, further suggest that this evaluation is domain contingent, with only knowledge that aligns with choice domain interacting significantly with label format. The importance of the choice domain prevails with regard to the interaction between knowledge and the perceived effectiveness of an investment. We are able to verify retail investor reactions to sustainable labeling, which are of major importance for fund both companies and legislators considering an introduction of mandatory sustainability labeling.

Hey, did you see that label? It's sustainable!: Understanding the role of sustainable labelling in shaping sustainable purchase behaviour for sustainable development

AbstractConsumers, nowadays, are becoming mindful of environmental issues than ever. The rising concerns for the adverse effects of consumption on environmental sustainability are leading to transformation in consumer behaviour. Consumers need relevant sustainability information about the products to shape sustainable purchase behaviours. On this note, marketers and organizations are increasingly using labels and logos for integrating sustainability evidence in their product offerings. This research integrates the theory of planned behaviour (TPB) with environmental concern, consumer effectiveness, consumer innovativeness and sustainable label awareness to determine how these affect the sustainable purchase behaviour for food products in China. The findings of structural equation modelling using data gathered from 273 consumers indicate all the constructs as significant, with consumer innovativeness having a negative and significant association. The present research expects to contribute to advancement in the literature on TPB and sustainable labelling by presenting a comprehensive and distinct model. Given the importance of the factors highlighted in the current research, marketers can design appropriate strategies by leveraging these determinants. The outcomes imply that marketers and policymakers need to make the consumers aware of sustainable labels and their favourable effects on the environment to promote sustainable consumer behaviour.

Helping Mother Earth: young children's responses to sustainability labels on food packaging

ABSTRACT Children are an essential group in the path toward sustainable diets. This study (N = 240) therefore experimentally investigates childrenʻs (8 to 12 years) brand attitude and purchase request intent after exposure to a verbal sustainability label combined with a visual cue on food packaging. Results indicate that childrenʻs environmental concern is an important moderator of the efficacy of such sustainability labels. For children low in environmental concern, it is beneficial to add a visual cue to a verbal label, as it positively affects packaging evaluation, and consequently, brand attitude and purchase request intention. This visual cue diminishes the efficacy of a verbal label, however, when children are high in environmental concern. Findings can assist food manufacturers, marketers and policy makers to more effectively stimulate children to adopt sustainable diets.

The power of ESG transparency: The effect of the new SFDR sustainability labels on mutual funds and individual investors

This paper analyzes the effect of the Sustainable Finance Disclosure Regulation (SFDR) on mutual funds and individual investors in the EU. First, we study whether affected funds increase their sustainability compared to a control group. Second, we examine if the regulation makes individual investors allocate more capital into more sustainable funds. In a difference-in-differences setting, we analyze the influence of the regulation on ESG fund scores and fund net inflows. Our results show that affected funds increase their sustainability rating after the policy intervention. Additionally, we find that a better ESG label leads to larger fund net inflows.

Divergence in Mutual Fund Sustainability Labelling

Divergence in Mutual Fund Sustainability Labelling

ПРАВОВОЕ РЕГУЛИРОВАНИЕ «ОТВЕТСТВЕННОГО» ИНВЕСТИРОВАНИЯ В РОССИИ И ЗАРУБЕЖНЫХ СТРАНАХ: ПОНЯТИЕ, ПРИНЦИПЫ, ПРИМЕРЫ

Introduction: the article is devoted to the analysis of regulatory framework of Socially Responsible Investing (SRI), which is an investment approach that takes into account environmental, social, and governance (ESG) factors in investment portfolio selection and management. The global SRI market is growing at an unprecedented rate, the value of global assets using environmental, social, and governance data to make investment decisions have nearly doubled in the past four years, and more than tripled in eight years (since 2012) to $40.5 trillion. Russia is gradually joining the contours of today's global ecosystem in terms of sustainable finance and responsible investment practices. In this context, a comparative analysis of the aforementioned issues acquires particular importance. Purpose: to form an understanding of the fundamentals of legal regulation of SRI in Russia and foreign countries based on the analysis of scientific sources and regulations. Methods: empirical methods of comparison, description, interpretation; theoretical methods of formal and dialectical logic; specific scientific methods: juridical-dogmatic method and the method of legal framework interpretation. Results: the study showed that taking into consideration ESG factors is becoming increasingly important for companies and investors. However, the concept of ESG has not been clearly defined so far, and therefore it is difficult to measure the ESG activity of companies. Currently, the EU is a global trendsetter and driver of sustainability transformation. In 2019, the European Commission unveiled the European Green Deal, an economic growth concept that aims to make Europe the first climate-neutral continent by 2050. On April 21, 2021, another step toward the Green Deal was taken – with the publication of the draft Corporate Sustainability Reporting Directive (CSRD) and the first Delegated Climate Act under the Taxonomy Regulation. It is worth highlighting that the CSRD Directive will influence non-financial reporting regimes elsewhere in the world, promoting global convergence and comparability in sustainability reporting. Conclusion: in Europe, with the exception of France, ESG performance is currently not a mandatory criterion for publicly traded companies. The French Energy and Climate Law 2019 (Loi Énergie et Climat) and the Decree implementing this law of May 27, 2021 (Décret n° 2021-663) establish mandatory non-financial reporting, which is to apply to all investment companies managing assets greater than €500 million starting from 2022. German and French small and medium-sized enterprises (SMEs) fear that the sustainable financial regulation planned by the EU may lead to even more bureaucracy and financial difficulties that they may be unable to cope with. The French government has proposed a solution to this problem by organizing Impact platform in spring 2021 to train French companies on how to fill in non-financial reporting indicators. The Russian legislator should become familiar with certain elements of the German Sustainable Finance Strategy of May 5, 2021, in particular, the concept of sustainability labeling for consumers (‘traffic light’ labeling) as the ‘traffic light’ system is assumed to help investors to identify more easily the green investment opportunities of each company. The adoption of the Law ‘On Public Non-Financial Reporting’ would help to improve the legal regulation of responsible investing in Russia.

Do Labels Have a Potential to Induce Spillover Effects? Evidence from Sustainability Labels Related to Food

Do Labels Have a Potential to Induce Spillover Effects? Evidence from Sustainability Labels Related to Food

Blockchain-enabled Sustainability Labeling in the Fashion Industry

This study explores the relative impact of blockchain-enabled sustainability labeling on consumers purchasing behavior when shopping for fashion products. A conjoint experiment was conducted where participants (n=84) assigned scores to stimuli cards according to preference in a specific shopping scenario. Results showed that “blockchain trademarked” did not have much impact relative to “low price” and “high product rating”. Further analysis showed that “blockchain trademarked” had a relatively stronger impact towards those participants (n=22) who indicated that living a sustainable lifestyle is important. Our findings show that there is a need for educating consumers about blockchain and the associated benefits for improving future transparency in sustainability in the fashion industry. Overall, these findings provide valuable grounds for further research on how blockchain-enabled sustainability labeling can create value for both consumers and companies within the fashion industry.

How environmental sustainability labels affect food choices: Assessing consumer preferences in southern Italy

This paper assesses consumer preferences and willingness to pay for three different environmental sustainability labels (EU Organic Farming, Rainforest Alliance, ‘Per il Clima-Legambiente’) and information cues about the origin displayed on a processed food product, namely tomato purée. Using a choice experiment and conditional logit models, the results show that: i) preferences for the environmental sustainability labelled product increase when consumers have proper knowledge about the meaning of the labels; ii) the information cue about the product's domestic origin is important for all consumers, regardless of their education, unlike environmental sustainability labels that are more appreciated by well-educated consumers; iii) consumers' willingness to pay is higher for labels with greater market penetration, regardless of certification by private or public organisations. Findings suggest that the adoption of environmental sustainability labels by food producers should be combined with effective information policies aimed at increasing consumer awareness.

Product Choice: Does Eco-Labeling Play an Important Role in Apparel Consumption in India?

Anecdotal evidence suggests that eco-labeling can be used as a communication tool. Although a considerable amount of eco-labeling research has been undertaken over the last few decades, only one study was conducted in India. The majority of labeling studies were conducted in the United States and Europe. The overarching objective of this study is to investigate how gender and age may affect the consumers’ reliance on sustainable labels to guide their purchases in India. In total, 309 usable surveys were collected from 198 females (64.1%) and 111 males (35.9%). Our findings revealed that both men and women perceived clothing fit and comfort as the two most significant evaluative cues. In general, Indian consumers rely a great deal more on the fit, comfort and style to evaluate clothing than on eco-labels and ethical labels. This implies that apparel shoppers are unlikely to sacrifice physical comfort and aesthetics for sustainability. Many Indian consumers are value-oriented shoppers. They often shop around to search for the best value to justify their choices, while satisfying their physical and psychological needs. In terms of the effects of age, younger consumers are relatively more familiar with sustainable labels than their older counterparts.

Cluster analysis to validate the sustainability label of stock indices: An analysis of the inclusion and exclusion processes in terms of size and ESG ratings

Sustainability stock indices play an important role in guiding socially responsible funds to their constituents. Thus, to find out whether the term sustainability is more than just a label, we analyze the inclusion and exclusion criteria applied by sustainability indices, and we compare them with those applied by conventional indices. We analyze the level of sustainability and size of the companies included in and excluded from five sustainability indices compared to a control group of 11 conventional indices. Our results show that the level of sustainability influences the inclusion process and, to a lesser extent, the exclusion process of the five FTSE4Good indices. However, we find similar results for several conventional indices. In addition, the size criterion dominates the sustainability criterion in the inclusion and exclusion processes of sustainability indices like in conventional indices. Further, we use different cluster algorithms to determine that the inclusion and exclusion processes of four of the five sustainability indices are different from those of the conventional indices. Our results validate the use of the “sustainability” label for four of five sustainability indices but also show that further differentiation between sustainability and conventional indices is needed.

Sustainable food labelling: considerations for policy-makers

Improving the sustainability of the global food system is a policy priority. There are multiple types of sustainability labels in the food market, and policy-makers need to know what constitutes an effective label. We discuss the use of labels to inform consumers about the economic, social and environmental sustainability implications of their food purchasing choices. We categorise these sustainability labels and explain the opportunities they offer and the challenges they pose to be effective. Improved consumer information on the sustainability of food products can serve as an incentive for operators in the food supply chain to increase their sustainability. Specific choices made on the type of food label used are likely to affect their. A comprehensive mandatory labelling and certification scheme is a promising course of action from a policy perspective, if it covers the multiple dimensions of sustainability, and uses scoring and evidence-based criteria.

Green identity labeling, environmental information, and pro-environmental food choices

This study examines the effectiveness of green identity labeling and environmental information in nudging consumers toward pro-environmental food choices, using an online discrete choice experiment conducted on US respondents. Results reveal that the green identity labeling in itself is ineffective at increasing consumer valuation for sustainable labels. Nevertheless, the environmental information intervention and its joint use with green identity labels can enhance consumer valuation for already existing pro-environmental foods instead of the novel food products. The policy implications for encouraging sustainable behaviors are discussed in the paper.

Sustainability Labels on Olive Oil: A Review on Consumer Attitudes and Behavior

Product labeling is a way to inform consumers and increase their awareness about sustainability attributes of products. It guarantees the use of specific production conditions, promotes market incentives and highlights environmental, social and/or ethical product attributes. This study provides a literature review of sustainability labels on olive oil including consumer attitudes and behavior towards this product. Results show that consumers have positive attitudes towards olive oil carrying sustainability labels and are willing to pay more for olive oil carrying those labels. However, the major drivers of this behavior are far from being related to sustainability. This insight jeopardizes the main objective of those labels and suggests more clarifications about the information delivered by them. More in-depth investigations are needed about the drivers of consumer behavior towards olive oil carrying sustainability labels.

Halo Effect and Source Credibility in the Evaluation of Food Products Identified by Third-Party Certified Eco-Labels: Can Information Prevent Biased Inferences?

Despite the growing awareness of the need to promote the consumption of organic food, consumers have difficulties in correctly identifying it in the market, making frequent cognitive mistakes in the evaluation of products identified by sustainability labels and claims. This work analyzes the halo effect and the source credibility bias in the interpretation of product attributes based on third-party certified labels. It is hypothesized that, regardless of their specific meaning, official labels lead consumers to infer higher environmental sustainability, quality and price of the product, due to the credibility attributed to the certifying entity. It also examines the extent to which providing the consumer with accurate labeling information helps prevent biased heuristic thinking. An experimental between-subject study was performed with a sample of 412 Spanish business students and data were analyzed using partial least squares. Findings revealed that consumers tend to infer environmental superiority and, consequently, higher quality in products identified by both organic and non-organic certified labels, due to their credibility. Label credibility was also associated with price inferences, to a greater extent than the meaning attributed to the label. Interestingly, providing accurate information did not avoid biased heuristic thinking in product evaluation.

Is the whole more than the sum of its parts? Challenges and opportunities for a holistic consumer-friendly sustainability label on food

How to enable more widespread sustainable food choice and diets is an unresolved challenge. A consumer-friendly sustainability labelling scheme ‘holistically’ encompassing all sustainability aspects ‘in one’ might be a way forward, but this idea entails both opportunities and challenges, not least given that this requires a common understanding of what sustainability is, and which sustainability dimensions need to be communicated. We address this global problem through qualitative expert elicitation, interviewing sustainability and labelling experts from academia, think tanks and non-governmental organisations, food producers, the retail sector, and governmental bodies about the steps to consider and the challenges and opportunities entailed. Our findings reveal mixed arguments for and against a holistic sustainability label. Experts suggest that consumers and food sector stakeholders appear to be ‘ready’ for and perceive such a label as a desirable tool. Nevertheless, unanticipated consequences could potentially hamper its impact, and challenges are the complexity of the issue, the lack of data, and that it is unlikely sector stakeholders can agree. We conclude that the most important aspects to improve effectiveness are the information content allowing to compare to alternatives, a consistent application on all products through mandatory labelling, and coupling implementation of a label within a broader supportive policy mix. We discuss four different policy scenarios that each show how the opportunities and challenges can play out in different potential routes from here.