making sense of symbols pt. 3
what’s in it for you?
• find out what the eco-logo market landscape looks like
• discover who are the elusive eco-consumers
• get our grade of the eco-logo industry
10-12 minute read
Get ready for the final installment of our series on eco-logos. We first answered the question “what are they,” and also learned about their classification and certification process. Then we investigated “when and how they came to be” by reviewing the key role the United Nations plays in the evolving story. Finally, we are analyzing “why they are important.” To do this, it will be useful to get an overview of the scope of the environmental marketplace.
money, money, money!
According to Fortune Business Insights Research, in just five years the global green packaging market size is projected to reach almost 400 billion USD [3]. Keep in mind this is just for packaging, not for products. In the United States alone, consumers spend about $14 trillion each year, which is about two-thirds of the US gross domestic product. Consumer Packaged Goods (CPG) is a significant portion of this overall spending, valued in trillions of dollars, which makes CPG a vital part of both the U.S. and global economy [2]. Of the CPG sector, sustainable products were forecasted to amount to 150 billion USD in 2021, with continued growth for years to come [7]. Market research from sources including Nielsen, McKinsey, and the WWF agree that sustainability will continue to be a big focus for consumers [2, 8, 11]. The NYU Stern Center for Business released a Sustainable Market Share Index in 2021 which showed that products utilizing sustainability marketing resulted in 54.7% of CPG market growth from 2015-2019 [12]. Even despite the Covid-19 pandemic, sustainably marketed products continued to grow in 2020.
Basically, all of these numbers mean that there is a lot of money for sustainably marketed products in the next five years. Remember that eco-logos are tools for conveying information to consumers about a product, service, or company’s sustainable efforts. Even though they were initially developed for education purposes, eco-logos are inherently messengers of marketing. The goal of eco-logos and marketing is identical: to convey information in an effort to persuade a consumer to make a purchase decision. But who are the traditional consumers driving this sustainable market growth?
everyone and no one.
Within 16 years of their creation, academics were already dissecting the effect of ecolabels. As Roger D. Wynne noted in 1994, “the green and latent green consumer segment defies easy identification” [13]. However, pinpointing who is the “green consumer” has not necessarily become easier with time, as topic-relevant data availability is limited [6]. There have been successes in identifying consumers within market segments, but often results can be contradictory. Socio-economic factors seem to be important, as eco-labeled products often come at an additional expense compared to their non-labeled counterparts [15]. As we review in the next section, however, wealth is not the only factor.
One study found younger and older consumers were similar in their decreased intention to buy eco-labeled products whereas those who were in the middle age group were more likely to consume them. This contrasts with another study where there was a more linear relationship, with purchase intention declining with age. Multiple studies seem to have identified women, those of higher education, and of better economic standing as being key markers [9].
The United States Pew Research Center has conducted many studies on Americans’ feelings surrounding climate change. Across several studies, some of which include multiple countries, and others which are exclusively focused on the US, the results are generally the same. Identifying characteristics of those who are more concerned include those who are politically more left-leaning, younger, and more educated [10]. An interesting finding is that those who have a positive view of the United Nations are more likely to have confidence regarding international efforts to tackle climate change [4]. A study focused on the EU corroborates some of these findings identifying determinants of increased sustainable consumption. They find that women, and individuals between 25-44, of higher education, and dwelling in urban areas are more likely to consume eco-logo products. In the EU there are varying degrees of wealth between countries, and they found that nations with higher GDP had more eco-label purchases.
In contrast to specific attributes, a Harvard Business Review article details how almost anyone can be a sustainable consumer if appropriate marketing is used to reach them. Americans who identify as right-leaning or conservative can be less eco-conscious because they can view environmentalism as part of the liberal identity. This translates into some Republicans being less likely to buy lightbulbs with the label “Protect the Environment.” In contrast, another study noted that Republicans who were targeted with messages of “joining the fight” and appeals to their civic duty were more likely to recycle [14]. Therefore, what we understand from all this research is that anyone can be an eco-consumer if they are addressed appropriately. This information underscores the point that eco-logos have the opportunity to educate consumers, an area in which they appear to be underperforming.
simple, it is not.
As we detailed above, many studies implicate wealth or disposable income as an important factor in being an eco-consumer. However, we wondered if economic prosperity could be a predictor for different things, such as environmental group membership, or whether there is more support for environmental protection over economic growth in stronger economies. It appears it's not that simple.
Fig 1. Data was taken from Wave 7 of the World Values Survey, question 99. Data excludes DK/NA, and collapses both active and inactive membership into “belong” for a simple contrast versus “don’t belong”. GDP data was taken from the 2020 IMF WEO Database.
To evaluate these ideas, we turned to the World Values Survey (WVS) which has been administering nationally representative surveys centered on cultural values in many countries every five years since 1981. We looked at the most recent wave of the survey, wave 7 (2017-2021) [6], specifically question 99, which asks about an individual’s membership in an environmental organization. We simplified the data into a dichotomous “belong” or “don’t belong,” and charted against highest to lowest GDP countries (of those countries who were surveyed, which was not all countries). If more wealth translated into more interest in the environment, the expected line would peak at the left and slowly fall to the right (orange line). However, this is clearly not the case. Even Germany, with its famed Blue Angel organization, falls below the average of 12.9% “belonging” (red line). There are many factors which play into membership rates, including that environmental activism can be affected by a population’s perceived assessment of their government on environmental issues.
Fig 2. Data was taken from Wave 7 of the World Values Survey, question 111 which asks respondents which is closer to their view either “Protecting the environment should be given priority, even if it causes slower economic growth and some loss of jobs” or “Economic growth and creating jobs should be the top priority, even if the environment suffers to some extent”, with a third option “other” only provided only if a respondent volunteers another answer. GDP data was taken from the 2020 IMF WEO Database.
Next, we considered Q111 from the WVS Wave 7 which basically asks respondents if they agree with a pro-environment or pro-economic sentiment. Again, we are assuming that having more money translates to being more likely to consume eco-logos. Therefore, citizens of wealthier countries should be much more likely to say they support environmental protection. Figure 2 shows clearly that this is not the case, or again that there are likely a lot more factors to explain each country’s results.
when in doubt, regress it out.
In this section we will review a regression analysis we undertook utilizing the same WVS Wave 7 data, but this time focusing only on the United States. For the sake of accessibility, this section will be simplified, but the main point behind presenting this is to show some interesting potential new threads of study, especially at the intersection of gender. Results from other studies corroborate some of this information so we will present them as potential areas for future study.
Fig 3. Results of regression analysis where Q79 of WVS Wave 7, “confidence in the environmental protection movement” is a binary dependent variable. Data suffers from heteroskedasticity, which the author is working to resolve, and intends to publish an update in the future.
The results indicate that overall, women are 5.52% points more likely than men to say they have confidence in the environmental protection movement, ceteris paribus or all other things being equal. However, liberal men are 10.72% points more likely than liberal women to say they have confidence in the environmental protection movement, ceteris paribus. It is interesting that the result is greater than liberal women, and therefore, this may open up potential or validate trends in the ecolabel and sustainability product market.
The most striking result of the analysis is that those who said they had confidence in the Women’s movement were 46.99% points more likely to say they had confidence in the environmental protection movement over individuals who said they do not have confidence in the Women’s movement, ceteris paribus. A final interesting note is that income and social class alone were not statistically significant when added to the model by themselves. It could be that they require an interacting term or that the relationship is not linear when considering confidence in the environmental movement. Even if we can’t pinpoint sustainable consumers with this data, we can still evaluate if the efforts of eco-logos over the last half-century have been effective.
the report card.
If we were to give the eco-label industry a grade, it would be a “C.” As many studies have pointed out [1, 6, 9, 13, 15], the effectiveness of eco-labels is questionable. Even manufacturers have trouble determining if eco-logos provide a sales boost. But who cares about the corporations, what about the environment? That, too, is often murky as eco-labels can be used as a form of advanced greenwashing. Organizations like Rainforest Alliance have encountered no shortage of controversies over the years, a topic which will require its own series in due time.
Interestingly, one study mentioned that eco-logo consumers may use their consumption as a form of moral licensing [1]. This means that they “feel better” because they buy eco-labeled products, so it gives them cover to partake in other activities which have negative consequences for the environment. This results in a net negative effect for the environment from those who buy eco-labels. Why then, does almost every researcher and activist say that these programs should be maintained if their results are so unclear, if not negative [1, 6, 9, 13, 15]? Like most meaningful things, progress takes time. A lot of effort across the globe went into building the current eco-label ecosystem. If we simply did away with it, we would lose all that hard work. Like any report card, a “C” is not the entire story, it just represents a period of time, not the full potential. Dramatic improvement can happen with small changes in activities and effort. If you do support an eco-logo, it is important to have a pragmatic approach. Only buying “eco-label” products won’t save the environment. It is still an act of consumption, which necessitates resources be removed from the environment, transformed into a final product, and shipped across the world. Consider it the bare minimum one with additional resources can do. If we shift our perspective from eco-labels as proactive, to being reactive, we can see that it is really just the beginning.
our two cents
The most overlooked part of the eco-label equation is you. Even if eco-logos were perfect and each one benefited the environment in a tangible way, people might still not engage with them because they put the burden of education on the consumer, who is already overwhelmed. In addition, the average citizen and eco-label NGOs do not have the power to regulate businesses. Ultimately, to be effective, eco-logos need to be backed by government support. While regulation is considered a dirty word that often shuts down conversations, legislation is an important tool that only succeeds after debate and compromise. With refocused guidelines backed by thoughtful laws, consumers, corporations, and the environment alike may finally see clearer results from adopting eco-logos in the future.-
1. Barkemeyer, Ralf, William Young, Phani Kumar Chintakayala, and Anne Owen. “Eco-Labels, Conspicuous Conservation and Moral Licensing: An Indirect Behavioural Rebound Effect.” Ecological Economics 204 (February 1, 2023): 107649. https://doi.org/10.1016/j.ecolecon.2022.107649.
2. McKinsey & Company. “Consumers Care about Sustainability—and Back It up with Their Wallets,” February 6, 2023. https://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/consumers-care-about-sustainability-and-back-it-up-with-their-wallets.
3. “Green Packaging Market Size | Global Report [2021-2028],” n.d. https://www.fortunebusinessinsights.com/green-packaging-market-105113.
4. Greenwood, Shannon. “Climate Change Concerns Make Many around the World Willing to Alter How They Live and Work | Pew Research Center.” Pew Research Center’s Global Attitudes Project, March 22, 2022. https://www.pewresearch.org/global/2021/09/14/in-response-to-climate-change-citizens-in-advanced-economies-are-willing-to-alter-how-they-live-and-work/.
5. Inglehart, R. Haerpfer, C. Moreno, A. Welzel, C. Kizilova, K. Diez-Medrano, J. M. Lagos, P. Norris, E. Ponarin & B. Puranen et al. (2018) World Values Survey: Round Six - Country-Pooled Datafile, Madrid, Spain & Vienna, Austria: JD Systems Institute & WVSA Secretariat. doi.org/10.14281/18241.8
6. Meis-Harris, Julia, Celine Klemm, Stefan Kaufman, Jim Curtis, Kim Borg, and Peter Bragge. “What Is the Role of Eco-Labels for a Circular Economy? A Rapid Review of the Literature.” Journal of Cleaner Production 306 (July 1, 2021): 127134. https://doi.org/10.1016/j.jclepro.2021.127134.
7. Nielsen. “The Database: The Business of Sustainability,” September 21, 2022. https://www.nielsen.com/insights/2019/the-database-the-business-of-sustainability/.
8. NielsenIQ. “NielsenIQ Releases New Report Focusing on Sustainability’s Impact on Consumer-Packed Goods Industry - NIQ.” NIQ, November 30, 2022. https://nielseniq.com/global/en/news-center/2022/nielseniq-releases-new-report-focusing-on-sustainabilitys-impact-on-consumer-packed-goods-industry/.
9. Noblet, Caroline L., and Mario F. Teisl. “Eco-Labelling as Sustainable Consumption Policy.” Handbook of Research on Sustainable Consumption, March 9, 2015, 300–312. https://doi.org/10.4337/9781783471270.00031.
10. Pew Research Center. “U.S. Views on Climate Change Differ by Generation, Party and More: Key Findings | Pew Research Center,” June 2, 2021. https://www.pewresearch.org/short-reads/2021/05/26/key-findings-how-americans-attitudes-about-climate-change-differ-by-generation-party-and-other-factors/.
11. World Wildlife Fund. “Search for Sustainable Goods Grows by 71% As ‘Eco-Wakening’ Grips the Globe,” n.d. https://www.worldwildlife.org/press-releases/search-for-sustainable-goods-grows-by-71-as-eco-wakening-grips-the-globe.
12. “Sustainable Market Share Index TM - NYU Stern,” n.d. https://www.stern.nyu.edu/experience-stern/about/departments-centers-initiatives/centers-of-research/center-sustainable-business/research/csb-sustainable-market-share-index.
13. “The Emperors New Eco logos - A Critical Review of the Scientific Certification Systems Environmental Report Card and The Green Seal Certification Mark Programs. on JSTOR,” n.d. https://www.jstor.org/stable/24782340.
14. White, Katherine. “The Elusive Green Consumer.” Harvard Business Review, April 5, 2023. https://hbr.org/2019/07/the-elusive-green-consumer.
15. Yokessa, M., & Marette, S. “A Review of Eco-Labels and Their Economic Impact.” International Review of Environmental and Resource Economics 13, no. 1–2 (April 26, 2019): 119–63. https://doi.org/10.1561/101.00000107.
