Positive, negative or graded sustainability labelling? Which is most effective at promoting a shift towards more sustainable product choices?

Abstract

AbstractSustainability labels convey information about different product attributes, such as its environmental impact, lifespan or ethical performance. The labelling can be either positive (only identifying the most sustainable products available on the market), negative (only identifying the least sustainable products available on the market) or graded (comparing the sustainable performance of a product with that of all other products on the market). We assess the relative performance of these three labelling approaches in terms of influencing product choices. A nationally representative sample of 1243 consumers from Germany, Spain and the Czech Republic participated in an incentive‐compatible online discrete choice experiment with random allocation to different labelling approaches. Compared with positive and negative labels, graded labels were most effective in guiding consumers towards more sustainable product choices. These findings support policy interventions that convey product sustainability with graded labels.