Question

What are the benefits of the Ecolabel for businesses?

Answer 1

Eco-labeling has a number of major benefits:

1. Informing consumer choice

Eco-labeling is an effective way of informing customers about the environmental impacts of selected products, and the choices they can make. It empowers people to discriminate between products that are harmful to the environment and those more compatible with environmental objectives. An eco-label makes the customer more aware of the benefits of certain products, for example, recycled paper or toxic-free cleaning agents. It also promotes energy efficiency, waste minimization and product stewardship.

2. Promoting economic efficiency

Eco-labeling is generally cheaper than regulatory controls. By empowering customers and manufacturers to make environmentally supportive decisions, the need for regulation is kept to a minimum. This is beneficial to both government and industry.

3. Stimulating market development

When customers choose eco-labeled products, they have a direct impact on supply and demand in the marketplace. This is a signal which guides the market towards greater environmental awareness.

4. Encouraging continuous improvement

A dynamic market for eco-labeled products encourages a corporate commitment to continuous environmental improvement. Customers can expect to see the environmental impacts of products decline over time.

5. Promoting certification

An environmental certification program is a seal of approval which shows that a product meets a certain eco-label standard. It provides customers with visible evidence of the product's desirability from an environmental perspective. Certification therefore has an educational role for customers, and promotes competition among manufacturers. Since certified products have a prominent logo to help inform customer choices, the product stands out more readily on store shelves. Coveting the logo may induce manufacturers to re-engineer products so that they are less harmful to the environment.

6. Assisting in monitoring

Another benefit of an official eco-labeling program is that environmental claims can be more easily monitored. Competitors and customers are in a better position to judge the validity of a claim, and will have an incentive to do so should a claim appear dubious.