Commonly Used Ethical Labels Limit Their Usefulness, Finds Study

09 Dec 2016 --- Nowadays, product labels are often used to enable consumers to choose products that are friendly to the environment and to animals, natural, healthful and socially responsible. However, certain features of commonly used labels limit their usefulness.

The thesis of Tassos Michalopoulos, “The Citizen goes Shopping: A framework for the assessment and optimization of production from the perspective of society,” successfully defended on 5 December, identifies a number of these limitations and presents an innovative labeling approach designed to address them.

The usefulness of the commonly used “endorsement” labels is limited by offering a single certification grade which is “static,” in the sense that certification standards do not reflect the evolution of the market. Also, this type of labels is typically voluntary and defined by stakeholders. Consequently, they do not inform consumers on the ethical performance of non-certified products. 

This creates room for the misleading promotion of uncertified products and limits the opportunities for concerned consumers to choose products based on their ethical preferences. In addition, the labels used fail to motivate product improvement beyond certification standards, and allow the emergence of a confusing variety of overlapping labels. They also allow production stakeholders to resist socially desirable certification requirements when these are unfavorable to their business.

Therefore, commonly used ethical labels for ethical aspects of production do not create the “free-market” dynamics according to which products must continuously innovate and improve, or else become obsolete and vanish. 

As an alternative, this thesis works out an innovative “comparative” labeling approach for product substitutes, which addresses these limitations. The proposed type of label is multi-grade or continuous, dynamic, mandatory, and defined by society. 

It is argued that this type of labeling can motivate boosting ethical consumerism as a force for the consumer-based optimization of the market. In democracies, this can be particularly useful regarding issues about which society is concerned, yet the state has limited ability to regulate the market. 

Among other uses of the product assessment method behind the proposed labeling approach is the comparative ranking of presently available labels, so as to inform consumers on the relative impact of different certified products, and the justification of state incentives (and disincentives) to ethically superior (inferior) production.