Description
eco-labelling is a part of the environmental management course. It first talks about what eco-labelling is all about. It then moves on to explain what are different types of labels and the characteristics of eco-labels. It then finally wraps up with the issues with eco-labels and the firms view with these labels.
What is Eco–Labelling?
o
It is a conscious effort to inform consumers about the effects of
• Production • Usage and • Waste phases
of the products/services being consumed
o
The objectives of this initiative is 2-fold:
• Consumers: Inform consumers about the effects of their
consumption and thus generate change towards more environmentally friendly consumption pattern • To encourage Producers, Government & other agents to increase environmental standards of products/services
Types of Labels
?
?
?
One-sided claims by Manufacturers, Importers & Distributors Based on pre-set indices and done by independent verification (Rare) Comparative environmental quality for products and production processes too. Generally issued by a 3rd party (government supported agencies, eg. EU eco-label) Characteristics of eco-labels:
• Third party & Voluntary • They seek to identify products with less environmental impact
?
throughout their life cycle. • Selection of product categories & criteria are done by independent experts, which are publicly available • Product may use eco-label for a fixed period
Why are end consumers made aware?
? ? ?
Labels can improve image and hence sales Firms will become more accountable for their processes and materials used Additionally it will also make consumers aware of broad environmental issues A survey among developed countries indicated:
• Majority people were aware of environmentally sound products
?
and made a conscious effort to buy them • Visibility of a label played an important factor • Reliance on symbols was higher than actual knowledge of facts mentioned on the labels • Price premiums were determined although their basis was weak as the surveys did not adhere to strict protocols of valuation methods
Issues with labelling
? ? ? ? ? ?
Lack of objectivity in setting criteria Difficulty in defining product categories as no 2 products are perfect substitutes Lack of estimated demand for labelled goods Lack of real rewards for improvement Fixed validity period (important especially for capital intensive products) It could also result in distortion of allocation resources, inefficiencies and thus distortion of prices
The Firm’s point of view
?
A firm’s responsiveness to environmental issues is positively influenced by:
? Customer pressures ? Shareholder pressures
? Government regulatory pressures
? Neighbourhood and community pressures
?
It is negatively influenced by:
? Other lobby group pressure sources
? The Firm’s Sales to Asset Ratio
Market Impact
?
? ? ?
Difficult to ascertain as many factors contribute towards it; although available data suggest that with use of labels, sales have increased In many cases, demand has prompted supplier to apply for labels It could reduce output of unfriendly products Selectivity needs to be practiced, as demand has to be kept more than supply of labelled goods
International trade
Issues: ? Domestic interests/rules of producing countries and consuming countries are different ? Lack of transparency ? Developing countries at a disadvantage as their contribution to global trade is insignificant, thus losing competitiveness ? Changes in trade pattern are bound to happen
International trade (contd.)
Solution: ? Increase in transparency of schemes, leading to discussions among developing and developed nations ? Schemes under TBT (Technical barriers to trade) agreement, which apply to labelling too, have to be such so as not to create unnecessary barriers ? Internationally based labels to ensure standardization or at least compatibility among labels of different countries
Conclusion
?
The issue of eco-labels is complex for the many reasons stated ? It is coupled by the lack of any conclusive research on the topic ? Although the need for such a step is undoubted, which makes firms accountable towards the environment, makes consumers aware and intends to ensure sustainability ? The realisation that the system may not be perfect is present and so is the need for improvements
Thank You
doc_887122544.pptx
eco-labelling is a part of the environmental management course. It first talks about what eco-labelling is all about. It then moves on to explain what are different types of labels and the characteristics of eco-labels. It then finally wraps up with the issues with eco-labels and the firms view with these labels.
What is Eco–Labelling?
o
It is a conscious effort to inform consumers about the effects of
• Production • Usage and • Waste phases
of the products/services being consumed
o
The objectives of this initiative is 2-fold:
• Consumers: Inform consumers about the effects of their
consumption and thus generate change towards more environmentally friendly consumption pattern • To encourage Producers, Government & other agents to increase environmental standards of products/services
Types of Labels
?
?
?
One-sided claims by Manufacturers, Importers & Distributors Based on pre-set indices and done by independent verification (Rare) Comparative environmental quality for products and production processes too. Generally issued by a 3rd party (government supported agencies, eg. EU eco-label) Characteristics of eco-labels:
• Third party & Voluntary • They seek to identify products with less environmental impact
?
throughout their life cycle. • Selection of product categories & criteria are done by independent experts, which are publicly available • Product may use eco-label for a fixed period
Why are end consumers made aware?
? ? ?
Labels can improve image and hence sales Firms will become more accountable for their processes and materials used Additionally it will also make consumers aware of broad environmental issues A survey among developed countries indicated:
• Majority people were aware of environmentally sound products
?
and made a conscious effort to buy them • Visibility of a label played an important factor • Reliance on symbols was higher than actual knowledge of facts mentioned on the labels • Price premiums were determined although their basis was weak as the surveys did not adhere to strict protocols of valuation methods
Issues with labelling
? ? ? ? ? ?
Lack of objectivity in setting criteria Difficulty in defining product categories as no 2 products are perfect substitutes Lack of estimated demand for labelled goods Lack of real rewards for improvement Fixed validity period (important especially for capital intensive products) It could also result in distortion of allocation resources, inefficiencies and thus distortion of prices
The Firm’s point of view
?
A firm’s responsiveness to environmental issues is positively influenced by:
? Customer pressures ? Shareholder pressures
? Government regulatory pressures
? Neighbourhood and community pressures
?
It is negatively influenced by:
? Other lobby group pressure sources
? The Firm’s Sales to Asset Ratio
Market Impact
?
? ? ?
Difficult to ascertain as many factors contribute towards it; although available data suggest that with use of labels, sales have increased In many cases, demand has prompted supplier to apply for labels It could reduce output of unfriendly products Selectivity needs to be practiced, as demand has to be kept more than supply of labelled goods
International trade
Issues: ? Domestic interests/rules of producing countries and consuming countries are different ? Lack of transparency ? Developing countries at a disadvantage as their contribution to global trade is insignificant, thus losing competitiveness ? Changes in trade pattern are bound to happen
International trade (contd.)
Solution: ? Increase in transparency of schemes, leading to discussions among developing and developed nations ? Schemes under TBT (Technical barriers to trade) agreement, which apply to labelling too, have to be such so as not to create unnecessary barriers ? Internationally based labels to ensure standardization or at least compatibility among labels of different countries
Conclusion
?
The issue of eco-labels is complex for the many reasons stated ? It is coupled by the lack of any conclusive research on the topic ? Although the need for such a step is undoubted, which makes firms accountable towards the environment, makes consumers aware and intends to ensure sustainability ? The realisation that the system may not be perfect is present and so is the need for improvements
Thank You
doc_887122544.pptx