Outlook: Can Environmental Product Standards Enable Eco-Innovation?

Environmental product standards (EPS) certifying environmental product attributes are key for fostering sustainable consumption, which is an essential measure for achieving the Sustainable Development Goals (SDGs) adopted by the United Nations. EPS, also called environmental labels or eco-labels, are intended to describe environmental features of consumer goods and raise consumers’ awareness about sustainability. By fostering sustainable consumption they can become one of the main policy instruments for tackling climate change. They can be mandatory, where the provision of information is compulsory, or voluntary. In both cases EPS aim at correcting the information asymmetry between consumers and providers. Evidence shows that demand-pull is a decisive factor for firms’ to voluntarily provide environmental quality. Thus, by enhancing consumers’ awareness, it can spur eco-innovation. Nevertheless, EPS have also raised some concerns about barriers to trade and “greenwashing”. Furthermore, the recent multiplication of EPS has fostered a label competition, confusing prospective consumers, and thus endangering potential sustainability benefits resulting from EPS. The aim of this chapter is to provide policymakers with an overview on how EPS can support eco-innovation. For this purpose we first describe the different types of labels and review evidence on the different impacts of EPS. Later on, we analyze drivers, benefits and barriers of adoption of EPS and their relation to eco-innovation and environmental performance. Finally, we provide an overview on new behavioral insights to EPS.

Roger, Albert (2018), Outlook: Can Environmental Product Standards Enable Eco-Innovation?, in: Jens Horbach, Christiane Reif (Eds.), Sustainability and Innovation, Springer-Verlag, Cham, Switzerland, 95-112