During the past years, the topic of climate change crisis became increasingly present in the public discussion and part of consumer consciousness. As consumers become increasingly aware of the environmental impact of what they buy, companies are increasingly interested in carbon labels. A carbon emission label or carbon label describes the carbon dioxide emissions created as a by-product of manufacturing, transporting, or disposing of a consumer product. Carbon labels have the potential to change both consumers’ and businesses’ behaviour and help consumers make informed decisions about the products they buy, based on the contribution of a product to global warming.
What is a product carbon footprint?
The product life cycle carbon footprint measures (in carbon dioxide equivalents – CO2e) the total greenhouse gas (GHG) emissions generated by the product, from raw material extraction through to the end of life.
The carbon footprint label is a clear identifier for products that have a certified carbon footprint. Carbon labels show consumers the “carbon content” of an individual product. An element’s carbon content is the total amount of CO2 emitted from each stage of its production and distribution, from source to store. Labels provide customers with verified information about carbon impacts to aid them in their purchasing decisions.
Product footprints should relate to a scope or boundaries, the most common of which are:
- Cradle to Gate: These measures total GHG emissions from raw material extraction through product manufacturing to the factory gate. Mostly used for business-to-business (B2B) products.
- Cradle to Grave: These measures total GHG emissions from raw material extraction to the manufacture, distribution, use and eventual disposal of the product. Mostly used for business-to-consumer (B2C)
Consumer purchasing power is the lever to drive decarbonization. With the rise in consumers’ awareness of climate change and the environment, there is an increasing demand for change in consumer goods’ production systems. Consumers demand readily access to information about the actual impacts of climate change on products and services.
To understand whether access to this information can enable consumers to shift markets towards more sustainable practices, Carbon Trust, in collaboration with YouGov, conducted international consumer research on carbon labels. The “Product carbon footprint labelling – Consumer research 2020” report showed that two-thirds of consumers surveyed think carbon labels on products are a good idea. France, Italy, and Spain are the countries with the highest levels of support for carbon labeling.
Although consumers believe that companies’ decarbonization and carbon labeling efforts are a good idea – but in an environment where labeling is not mandatory – half of the people agree that a product’s carbon footprint is not something they think of when choosing a product to buy.
Food chains and brands adopting carbon labels
More than ever, consumers are focusing on the carbon impacts of their purchasing decisions. Climate-related disclosures are needed; companies need to set plans and targets and collaborate with their supply chains to reduce carbon.
The carbon labels initiative is a step in the right direction. Due to the urgent need to understand the environmental impact of foods, and how food choices affect climate change, many companies “Unilever, Upfield Group, Mondelez International, and Oatly” are moving towards carbon neutrality and carbon labels.
Quorn Food, the world’s biggest meat alternative brand, provided the carbon footprint data for 60% of its product volume, making it the first meat free food manufacturer in the world to adopt the carbon footprint in its products. “People get nutritional data on food packaging to help them manage their health, so we think it’s essential to give people carbon emissions data so they can manage the environmental impact of the food they choose to buy,” says Sam Blunt, commercial operations director at Quorn Foods.
In 2019, Maple Leaf Foods announced that it had become the world’s first major food company to be carbon neutral and labels its Maple Leaf, Greenfield Natural Meat Co., Lightlife and Field Roast Grain Meat Co. brands as “carbon zero”.
Financial considerations of carbon labels
Carbon labels are designed to increase and drive consumer positive response, but they also put pressure on manufacturers, retailers, as well as consumers.
Producing a carbon label can be an expensive task. It entails analysing a lot of data or paying to obtain a reliable accredited certificate. Researchers have noted that if the cost of cheating to obtain a certified label is lower than the cost of cutting GHG emissions, then fake labels will appear, resulting in Greenwashing and distortion of the market.
Although adding carbon labels will likely not affect the product’s price, it will influence purchasing decisions in terms of comparing the same product with different companies and manufacturers. Traditional factors, such as price, seem to still rank higher than carbon labels in shopping decisions. Carbon labeling is beneficial for reducing GHG emissions, but the vast majority of consumers still do not perceive this information as very beneficial for decision making. However, with the shift in demographics and purchasing power shifting to younger, more conscious and aware generations, in addition to powerful consumer activism movements, stakeholder behaviours will change. Coupled with push from technological revolution, legislation, investor and supply chain pressures, the carbon labels are increasingly seen as instruments of a low-carbon economy.
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