Outline

Introduction
- Sustainability and need for circular economy
- Labelling for customers
- For producers
- Credibility issue
- Aim of the research
Introduction
Recently, there has been a substantial increase in the production of waste and consumption of
resources which may seem to negatively affect both the quality of our lives and the ability of
the future generations to meet their needs. In response to this, sustainable development has
been introduced to make certain that the present needs are encountered without
compromising the ability of the future generations to meet their needs. One of the possible
ways to achieve sustainable development is to implement a circular economy, which is an
economic system advocating products that are designed to be reused, remanufactured,
repaired and recycled (Kirchherr et al., 2017). In order for the adoption of a circular economy
to be successful, consumers need to be acknowledged whether the purchasing choices they
are making are in align with circular economy or not.

Eco-labels have emerged to notify customers and offer credible information regarding
whether the product choices are eco-friendly ones or not. Eco-labels inform customers about
more sustainable product choices in the market by, for example, illustrating a product’s
recyclability, reparability and reusability features. Through eco-labelling, consumers can
easily make more sustainable and environmentally friendly choices without the need for them
to spend substantial time and effort in investigating the green credentials of products (Meis
and Kashima, 2017). As a result, eco-labels can be considered as a solution to support
circular economy outcomes by guiding consumers towards more environmentally friendly
purchase options (Marrucci et al. 2019).

As far as the producers is concerned, there are several reasons that motivate the producers to
adopt eco-labels. Firstly, the increase in the demand for goods and services which possess
high environmental quality can in turn inspire the firms to offer eco-friendly and sustainable
goods. This demand in more sustainable goods has been increasing in many countries since
many consumers acquired knowledge and awareness of the environmental impact of their
consumption. Secondly, the higher willingness of the consumers to pay for environmentally
friendly products than for non-green products also appear to encourage the firms to adopt
eco-labels. Lastly, another major reason for the producers to implement eco-labels is that the
eco-labels offer the opportunity of the firm’s products to be unique and different from other
competitors in the market (Yokessa and Marette, 2019).
Given that the firms have several fair reasons that inspire them to adopt eco-labels, over the
last decade there has been a significant increase in the number and diversity of eco-labels as a
result of the growing market for green products. The website of Ecolabel Index (2018)
reports that 463 eco-labels have emerged in 199 countries over 25 industry sectors. This
exponential growth of eco-labels’ diversity can sometimes cause the eco-labels to lose their
value as they sometimes fail to serve for their intended purpose of giving the consumers
credible information. For example, in many cases, the consumers are imperfectly notified
about the environmental influences of their purchasing choices and as a result they make
incorrect choices which are based on unverified information.
References

Ecolabel Index (2018). Website available at http://www.ecolabelindex.com/.

Kirchherr, J., Reike, D., Hekkert, M., 2017. Conceptualizing the circular economy: an analysis of 114
definitions. Resour. Conserv. Recycl. 127, 221e232. https://
doi.org/10.1016/j.resconrec.2017.09.005.

Marrucci, L., Daddi, T., Iraldo, F., 2019. The integration of circular economy with sustainable
consumption and production tools: systematic review and future research agenda. J. Clean. Prod.
240, 118268. https://doi.org/10.1016/ j.jclepro.2019.118268.

Meis, J., Kashima, Y., 2017. Signage as a tool for behavioral change: direct and indirect routes to
understanding the meaning of a sign. PloS One 12 (8), e0182975.
https://doi.org/10.1371/journal.pone.0182975.

Yokessa, M., Marette, S., 2019. A review of eco-labels and their economic impact. Int. Rev. Environ.
Resour. Econ. 13 (1e2), 119e163. https://doi.org/10.1561/ 101.00000107.