Unpacking the labeling system in the EU

by | Jul 18, 2022

The European Commission is proceeding with proposals to develop a standardized labeling system that indicates consumer products’ environmental footprints. By offering detailed information on the environmental impact of products, the labeling system aims to make it clear to consumers how to make sustainable choices and make their consumption more sustainable. The mandatory sustainability labelling system that involves the environmental footprint during the products’ life cycle is probably on its way. Therefore, it is important for us to unpack the labeling system to learn more about the history and impacts of it. By grasping knowledge related to food labeling systems, we can raise our environmental awareness and make environment-friendly choices.

As labeling systems proliferate in the European market, it is important to trace back the history of some well-recognized labeling systems and try to learn from experience when trying to formulate a more comprehensive labeling system. Most labeling systems are voluntary, including the most well-known ones, “EU Ecolabel” and “Nutri-Score.” EU Ecolabel is a voluntary flower-shaped label displayed on nearly 90,000 products and services sold in Europe, that indicates to consumers which detergents, textiles, or hotels have a lower impact on the environment. This year, Ecolabel turns 30 and is still considered a reliable indicator of environmental excellence. It is managed by the European Commission and Member States, and looks at the product’s entire life cycle all the way from “the cradle to the grave” including the processes of “design, manufacturing, use, recycling, and disposal.”

Compared to EU Ecolabel, Nutri-Score is a labeling system focusing on food. It was first introduced in France in 2017 and is now applied in Belgium, Switzerland, Germany, Luxemburg, and the Netherlands. It has a scale of five colors from dark green to dark orange, and these colors are associated with letters from A to E. Dark green and the letter A symbolize the products with the best nutritional quality. The score is calculated based on how many unfavorable components 100 g of a given product contains, such as calories, saturated fatty acids, sugars, and sodium. It also displays the ratio of favorable components such as protein, fiber, fruits, vegetables, and healthy plant-based oils.

However, these labeling systems are facing challenges from both external and internal factors. Due to the lack of consumer awareness of eco-labeling systems, companies are not willing to put time, money, and effort into pursuing EU Ecolabel – partly because the products with the EU Ecolabel don’t necessarily gain an advantage in the market. [Iraldo, F., & Barberio, M. (2017). Drivers, barriers and benefits of the EU Ecolabel in European companies’ perception. Sustainability, 9(5), 751.] Even though previous research shows that more products in the market display EU Ecolabel, the growth in the use of the label is limited mostly to the inclusion of  more product categories under EU Ecolabel system instead of a higher percentage of certain products in the market

Also, the algorithms behind these labeling systems are more complex than their visual presentations. For example, products such as milk with added sugar that are not aligned with dietary guidelines can be categorized A or B in the Nutri-Score system due to the algorithms to sum negative and positive components. In this case, the positive component protein compensates for the negative component sugar. What’s more, the aim of Nutri-Score is to guide consumers to choose more nutrition-packaged food. Many fresh vegetables and fruits that are not sold in supermarkets are not included in the labeling system. Also, some healthy food imported from non-European countries that are perfectly aligned to a more plant-based diet is excluded from the Nutri-Score system. Take tofu as an example – it is sold in the Asian market without any label indicating nutritional and environmental information, even though it causes less environmental pollution than red meat and is a great source of protein.

Past research proves that labeling systems indeed help consumers make healthier and more environment-friendly consumption choices. Color-coded scoring schemes help people make better consumption choices, for example by purchasing food with better nutritional value. [Song, J., Brown, M. K., Tan, M., MacGregor, G. A., Webster, J., Campbell, N. R., Trieu, K., Ni Mhurchu, C., Cobb, L. K., & He, F. J. (2021). Impact of color-coded and warning nutrition labelling schemes: A systematic review and network meta-analysis. PLoS Medicine, 18(10), e1003765.] Also, the diffusion of EU Ecolabel helps to raise consumer awareness of environmental issues to different extents, according to different countries’ contexts. [Kijek, T. (2015). Modelling of eco-innovation diffusion: The EU eco-label. Comparative Economic Research, 18(1), 65–79.]

However, while the new labeling system is trying to calculate environmental footprints in the life cycle of all the consumer products, we need to understand that the algorithms behind the labeling systems are more complex than we’d think. The life cycle assessment “from cradle to grave” is mainly based on industrialized production settings. It lacks primary and even secondary data in many categories of products. [Cordella, M., Alfieri, F., Sanfelix, J., Donatello, S., Kaps, R., & Wolf, O. (2020). Improving material efficiency in the life cycle of products: A review of EU Ecolabel criteria. The International Journal of Life Cycle Assessment, 25(5), 921–935.] For example, the organic food production setting requires taking different natural factors into consideration, like situation of soils, water cycle, environmental footprint of free-range animals, etc. Therefore, lacking data on real-life production processes and just simplifying the calculation process by using industrialized production data will just add to the vagueness of the labeling system. Even within the same product category, the designs, qualities, and functionalities of products can be extremely different. While life cycle assessment methods are continuously evolving, the reliability of the standards behind the labeling system is under challenge. [Cordella, M., Alfieri, F., Sanfelix, J., Donatello, S., Kaps, R., & Wolf, O. (2020). Improving material efficiency in the life cycle of products: A review of EU Ecolabel criteria. The International Journal of Life Cycle Assessment, 25(5), 921–935.]

When unpacking the labeling system, we realize that it is important to learn from past experiences. Before applying a standardized sustainability labeling system to all consumer products, it is vital to collect more primary data in various categories, also besides industrial production settings, to finalize the algorithms behind the environmental footprint of products. Also, governments and NGOs should put more effort into educating consumers about the labeling system to maximize economic incentive for companies to reform their products. What’s more, while applying for certain labeling systems takes time and money, the European Commission should offer financial support for small farmers to help them get the same standard label as large industrial companies when the mandatory labeling system comes into use.

 

 

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