The number of people who want not to harm the world and leave a stable living environment to future generations is increasing day by day. And with this awareness, carbon emissions are tried to be controlled, which forces company owners to act more consciously. In this case, it increases the efforts to create a sustainable development area by measuring the carbon emissions related to meeting these conditions.
Companies try to meet this demand by reducing the carbon footprint, which is the carbon dioxide emissions that a product creates throughout its life cycle. At the same time, carbon footprint labels have begun to appear on products in North America, Asia, and Europe. Specifically, both the potential impact of the carbon footprint labels of a firm in the industry and the implications of information content for firms and consumers should be examined.
In recent years, the consumer market has entered an era of sustainable development. Many companies have realized that they are part of a larger asset and should help protect the public good. For example, General Electric has issued a credit card to help consumers earn greenhouse gas emissions credits to reduce their personal carbon footprint, and Wal-Mart has launched a Sustainability Index Consortium. In fact, a new business category, the professional pollution calculator, has emerged.
These are just a few examples of the emergence of sustainable development, an emerging mainstream concept. They are representative of a wider trend of internal and external power by firms forcing social change. 45 of the top 50 US companies showing this trend included sustainability efforts in their 2008 annual reports or websites. The growing concern about sustainability is not unfounded; Sustainability has rightly become a concern, as the world population exceeds 7 billion.
Sustainable development is defined as “development that meets today’s needs without compromising the ability of future generations to meet their own needs”. Surprisingly, corporate social responsibility (CSR) articles in leading marketing magazines only talked about sustainability from 2000 to 2013. MacCannell questioned whether ego-based consumption is sustainable and examined the selection of green products according to the characteristics of the consumers. It aims to draw attention to sustainability in the marketing literature by providing guidelines that can help focus future research in this important area. Therefore, it is very important to examine sustainability in a measurable way.
An effective way to quantify a firm’s sustainability level is with its carbon footprint label. The carbon footprint of a product represents the increase in carbon dioxide in the atmosphere resulting from the production, shipping, use and disposal of that product. A smaller carbon footprint means a smaller increase in carbon dioxide and a less detrimental impact on the sustainability of the world. In addition to firms, consumers are increasingly familiar with the term “carbon footprint” through climate change, multinational agreements and expanded news about green investment.
Carbon footprint labeling is an effective tool for consumers to recognize the sustainability of a firm’s products or services and compare them with those of other firms and their own preferences. Therefore, how consumers and firms will be affected by the implementation of a universal carbon footprint label deserves careful study. Similarly, a firm’s characteristics, industry, customer base, and carbon footprint tag details are factors that could potentially affect a firm’s reputation and financial results. Research can reveal surprising or illogical findings.
In parallel, consider nutritional information labels. Ippolito and Mathios found that the arrival of labels detailing food fat content coincided with reductions in fat consumption. The application of this result to carbon emissions suggests that carbon footprint labeling can increase consumers’ attention to carbon emission levels and potentially affect purchasing decisions, resulting in fewer products or products with lower carbon emission levels.
Specifically, estimates are derived about how consumers might respond to the sustainability activities undertaken by firms. The recommendations made are based on the assumption that carbon footprint labeling will become widespread and familiar to the average consumer in the near future, through a combination of industry adoption and government regulations and practices. The researches conducted provide a roadmap in this regard and are based on the review of relevant research on marketing, related business areas, news media and websites of companies and carbon footprint organizations.
Carbon Footprint Labeling
Until recently, carbon emissions were measured only at the national or firm level, which did not help consumers track their personal carbon emission levels. A carbon footprint label attempts to detail the emissions at the four stages of a product’s lifespan, manufacture, shipping, use and disposal. Since it is often not possible to create zero carbon emission products, companies can offset some of their carbon emissions with tools such as carbon emissions.
A carbon footprint label provides a benchmark for consumers to consider the carbon emissions of a product when making purchasing decisions. There is no universally accepted label yet. To facilitate our discussion, a hypothetical carbon footprint label is provided that includes various carbon emissions and offsets from existing and proposed systems, and the label has been adapted from existing labels.
This descriptive label presents the carbon footprint of a product using a single metric (eg gram) to provide common measurement for manufacturers and consumers. Carbon emissions for each of the four product life cycle stages are displayed for the sum of the four phases, offsets (recycling, carbon reductions), sum of offsets, and net emissions (total carbon emission minus total offsets). Emission data with different aggregate levels should assist consumers who want more detailed information, but reduce information overload for those who do not.
To facilitate consumer interpretation, a symbol system should be added so that consumers can compare carbon footprints in similar products. These domain icons scale from 0 to 4 and increase as a half domain. Fewer footprint symbols show a smaller footprint and a one-word rating (for example, poor, average, or good) accompanying icons. Product-to-product comparison is useful as it facilitates the consumer side by side between products with similar labels. (e.g. nutritional data)
Products vary in how different stages of their life cycle contribute to their carbon footprint levels. The biggest carbon footprint impact of the mower is gas emissions during use. Bottled water has a high carbon footprint in the transportation phase, as it is bulky and expensive to transport. Beef production requires considerable resources (to be raised to maturity). Finally, a television has high levels in all stages; It affects high weight carrying, perennial electricity consumption affects usage, and there are a few recyclable components and hazardous substances affecting disposal.
Current State of Sustainability and Carbon Footprint Labeling
Consumer advocacy for sustainability and the ability to choose products based on their carbon footprint is already emerging. In response, a number of corporate, nonprofit and government agencies have begun addressing this problem. Similarly, several companies, including IBM, Nike, Coca-Cola, Google, and Dell, are exploring ways to reduce their carbon footprint and have joined forces to create a common carbon footprint label. Sapporo shows a can of beer carbon emissions from growing, brewing, manufacturing the can and moving it to distributors. Quaker Oats demonstrated the use of carbon in cooking use.
The basis of carbon footprint labeling arises from a combination of social trends, legislation and product innovations, and fuel economy levels are mandatory for cars. Recycling of plastic, metal, paper and food products is now common. Energy efficient devices are common and often eligible for government discounts. Companies produce and distribute less packaged products. Firms cut greenhouse gases used in production and transportation; For example, Hollow Shaft aims to reduce the idle mileage trucks drive. In summary, technology, consumer demand, stability and government legislation will make carbon emission labeling a possibility in the near future. This result increases the importance of understanding what drives companies and consumers to use carbon footprint labels.
Author: Ozlem Guvenc Agaoglu