Food labeling has evolved significantly since its inception in 1850. From preventing foodborne illness outbreaks to revealing specific calorie counts, labels have evolved to meet the needs of consumers, providing the context and critical information to impact daily decision-making.
Today, with a growing focus on eco-friendly consumption, companies are adapting to meet the demands of the 78% of consumers who prioritize sustainability in their purchases. One effective strategy for food and beverage companies to attract and retain environmentally conscious consumers is by incorporating climate labels that highlight comprehensive sustainability features and product carbon footprints.
The Impact of Carbon Footprint Labeling
Assessing a product’s carbon footprint has become a vital tool for understanding the environmental impact of food production and consumption. Studies show that when consumers encounter food and beverage products with labels verified by organizations like the Carbon Trust, it can influence behavior — not only among those seeking such information but also among those who might prefer to ignore it.
Given this clear consumer preference, climate labeling has the potential to significantly impact upstream practices across the food system. As consumers increasingly prioritize environmental impact, companies are encouraged to adopt sustainable practices, such as sourcing from low-carbon suppliers, investing in cleaner technologies and improving product formulations.
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This fosters accountability and drives the food and beverage industry to place greater emphasis on sustainability in their sourcing strategies. It also shows up in a business’ bottom line, given that eco-conscious consumers are willing to pay 9.7% more for goods that meet certain environmental criteria.
Driving Forces Behind Carbon Labeling
Two key forces are driving the adoption of carbon labeling in the food and beverage industry: government regulations and industry initiatives. Government mandates, particularly in regions like the European Union, are leading the charge by requiring carbon labeling on all food and beverage products, ensuring that consumers are informed about the environmental impact of their purchases.
Meanwhile, industry groups and organizations such as The Science Based Targets initiative are proactively developing voluntary standards and certifications, allowing companies to go beyond compliance and demonstrate their commitment to sustainability to consumers, investors and downstream customers like retailers and distributors. Independent certification bodies are essential for either process, creating commonly agreed-on standards and clear comparability.
Distinguishing Real Sustainability Claims vs. Greenwashing Attempts
The lack of universal standards or regulations for sustainability claims makes it difficult for consumers to differentiate genuine efforts from misleading ones. This presents both challenges and opportunities for brands to lead in transparency efforts, through innovation, educational initiatives, stakeholder collaboration and industry standard-setting.
Between 2004 and 2008, the number of new products labeled with terms like “sustainable,” “sustainability,” “environmentally friendly,” or “eco-friendly” registered with the U.S. Patent and Trademark Office surged from 100 to 526. However, these labels often lack strict definitions, making it easy for consumers to be misled by vague or unverified claims.
Since introducing the Green Guides in 1992, the Federal Trade Commission has provided guidelines to prevent public companies from making misleading environmental claims. Following the Green Guides provides companies with a chance to prove their dedication to sustainability by consistently improving and offering radical transparency into the true impact of their products. This leads to improved consumer trust and brand differentiation.
The Future of Labeling
The growing demand for carbon labeling is expected to shape the future of the food and beverage industry, making carbon footprint information a standard feature on product labels. With nearly 80% of U.S. adults already considering the Nutrition Facts panel in their purchasing decisions, adding carbon data is not only forward-thinking for consumer packaged goods (CPG) companies and retailers but also a smart move.
Transparency in disclosing greenhouse gas emissions is crucial for boosting product sales, as it builds consumer trust and encourages environmentally responsible choices. This, in turn, fuels market demand for sustainable alternatives. Just as calorie counts provide essential nutritional insights, carbon labeling will offer valuable information about a product’s environmental impact, pushing companies toward more responsible production practices and furthering the tide of consumer demand for sustainability.
Lauren Porter, the Director of Growth and Innovation at HowGood, focuses on the mounting pressure in our food system to have transparent accountability in sustainability impact. With years of experience working with brands, retailers and food tech companies, she is passionate about sharing the HowGood framework for moving from ‘compliance’ to ‘comprehensive value’ regarding sustainability standards and communication. Porter has led teams that service retailers such as Whole Foods Market, Ahold Delhaize and Walmart in defining sourcing standards and product attribute requirements. She lives in West Texas, where her family has ranched for four generations.
