Miljøprojekt, 924 – Miljømærkningens pris

The Price of Ecolabelling

Summary and conclusions

The overall objective of this project is to analyse how companies perceive the costs and benefits from environmental labelling, focusing on the two labels: the Nordic `Swan' and the European `Flower'.

The majority of the companies have to a high or to some extent achieved their objectives regarding the labels. Moreover, most companies believe that environmental labelling improves their image.

One third of the companies state that the benefits achieved from labelling exceed the costs they have encountered. However, more than half of the companies do not feel that they have gained important advantages from environmental labelling, e.g. from additional sales and earnings.

With regard to the costs, environmental labelling does not imply large-scale investments in new technology, recruitments, education etc. In other words, the cost barriers are in general modest, and most companies are able to defray the costs of environmental labelling.

In conclusion, most companies have, at least to some extent, achieved their goals, whereas the economic impacts from environmental labelling have so far been limited. This does not necessarily imply that environmental labelling is without importance. On the contrary, environmental labels hold a number of potentials that make them attractive to companies. However, the prospects of environmental labelling depend on the values, attitudes and behaviour of all relevant stakeholders. Based on the results from the project, we have listed a number of recommendations for the companies, the customers and the administrators, which might stimulate the future development of environmentally labelled goods and services:

Companies. Even though companies in general do not experience substantial advantages from environmental labelling, the labels might have a number of indirect effects, which might increase the companies' competitiveness in the long run. For instance, environmental labelling might improve the companies' image and serve as a door opener for new markets. Furthermore, the costs of environmental labelling are very limited. However, companies also have to realise that environmental labelling is not a panacea, which automatically generates a number of positive impacts.
Customers. It is often concluded that customers care about the environment and are willing to pay a price premium for environment-friendly goods and services. However, this is not always the case. The results indicate that the customers' actual purchasing behaviour is not necessarily in accordance with `green' purchasing policies. For instance, a number of companies have experienced that the public procurement practises are inconsistent with formal policies. Realising that the public sector is the driver of environmental labelling, much has to be done in order to improve the public procurement: - e.g. through education, campaigns and political action.
Administrators. In general, companies are not pleased with the fee structure of the labelling schemes. They think it would be fairer to impose the fees on the companies who do not produce eco-labelled products. Moreover, when eco-labels in general do not increase the profit of products and services, the fees inevitable become an impediment to the future growth of environmental labelling. In general, there is a need to align the fee structure as well as the administrative procedures to the actual costs and advantages of environmental labelling.