Carbon Footprint Labeling – A low-carbon Economy Instrument

1. March 10th , 2021
Carbon Footprint Labeling – A low-carbon Economy
Instrument

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5. Carbon Footprint Labeling – A low-carbon Economy
Instrument
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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.
© 2021 Sustainability Knowledge Group
Carbon Footprint Labeling – A low-carbon Economy Instrument

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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 awareness
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.
© 2021 Sustainability Knowledge Group
Carbon Footprint Labeling – A low-carbon Economy Instrument

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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.
© 2021 Sustainability Knowledge Group
Carbon Footprint Labeling – A low-carbon Economy Instrument

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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.
© 2021 Sustainability Knowledge Group
Carbon Footprint Labeling – A low-carbon Economy Instrument

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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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Carbon Footprint Labeling – A low-carbon Economy Instrument

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