Consumers are mixed about the impact of ESG labels on purchasing decisions

A new report from Fordham University’s Gabelli School of Business suggests that US consumer interest in labels that highlight products’ “sustainable” attributes — and more fundamentally those “sustainable” attributes — is mixed. By surveying a sample of 500 consumers in the United States about how fashion brands might provide information on environmental, social and governance (“ESG”) efforts, including through labels on their clothing and accessories, the Gabelli’s Responsible Business Coalition found that only 13.1% of consumers indicated they were “very interested” in using eco-labels to guide their fashion purchases, while around 50% of consumers surveyed indicated “some level of interest” in eco-labels, and nearly 18% said they had “no interest at all”. ”

Setting the stage in its recently published report, the Responsible Business Coalition (“RBC”) states that companies – including those in the fashion sector – are “called upon to be both innovative and socially innovative to achieve a sustainable future. and responsible,” with the United Nations Sustainable Development Goals, in particular, “calling on businesses to adopt sustainable and socially responsible policies to address systemic societal and environmental issues such as accelerating climate change, pollution and inequality “. Such sustainability-focused pressures from regulators and intergovernmental organizations like the UN, coupled with research that consistently shows that “a significant increase in public concern for systemic environmental and social issues have prompted (at least some) brands to focus on “making their products more sustainable and socially responsible.

Against this backdrop, RBC sought to understand “the most effective ways for brands to communicate [their ESG efforts] with consumers” – emphasizing the use of labelling. A key takeaway is that while around half of consumers surveyed indicated “some level of interest” in eco-labels, “a large segment of customers” (nearly 50%) notsee the inclusion of eco-labels as a particularly valuable tool when it comes to helping them decide which clothes and/or accessories to buy. The RBC notes that interest in fashion eco-labeling is significantly influenced by age, with older consumers being significantly less interested in eco-labels than younger consumers, and the most interested consumers being in the age bracket. between 25 and 44 years old.

Consumers’ level of education also has a significant impact on their interest in fashion eco-labels, RBC found. “Specifically, the higher the level of education after high school, the greater the interest: consumers with only a high school diploma have the lowest level of interest. In contrast, those with post-baccalaureate degrees (eg, master’s, doctorate, JD, MD, etc.) had the highest level of interest. In addition, the survey results revealed that where consumers live – and their employment status – also affects their interest in eco-labels. In short: RBC’s findings indicate that eco-labeling is “most relevant for younger, college-educated, employed, and urban consumers.”

Assuming brands were to start using labels identifying the ESG elements of their operations and production, nearly half (46%) of consumers surveyed by RBC indicated that “recyclability” was an important issue for them . This is followed by human rights, which was important to 39% of consumers, while the use of chemicals, animal welfare and the use of materials were each selected by 33% of consumers surveyed. Information about a company’s carbon footprint was important to 31% of consumers surveyed, and finally, one in five consumers surveyed (20.7%) were interested in information about diversity and diversity efforts. business inclusion.

Similar to his findings regarding general consumer interest in brands adopting ESG-focused labels, one in five consumers (20.9%) indicated that “none of these information options would be important in his decision-making.

When asked to rank the ESG attributes they felt were most important for fashion brands to reach and inform consumers, a third of survey participants listed “recyclability” and “human and labor rights” in their “Top 3”. “Composition of materials” was in the Top 3 for 24% of respondents, followed by “animal welfare” and “use of chemicals” (23% of respondents put them in their Top 3) and carbon footprint (22%). Finally, less than 15% of consumers surveyed cited ‘water use’, ‘diversity and inclusion’ and ’employee education’ as their top 3 priorities for business.

Taken together, RBC says these results indicate that environmentally conscious fashion consumers may, in fact, want easy access to clothing sustainability credentials, and that their “first priorities are how to recycle their clothes and that they can be comfortable that people are treated fairly in the creation of their clothes. As for how consumers want to access this information, the majority of survey participants (65%) listed the eco-labels attached directly to the products they are considering buying as ideal, followed by an indication via ” a website icon or website filter for sustainable products”. .” This is distinct from QR codes, for example, which were the “least desired eco-labeling option”, with only one in five consumers expressing interest.

RBC’s findings come as a number of major brands have chosen to discontinue use of the Higg Materials Sustainability Index (“MSI”), a suite of tools aimed at helping companies measure – and to make available to the public information on the – environmental impact of their offers, following allegations of greenwashing. The Higg MSI is one of many certifications available for brands to calculate and tout the sustainability of their products in light of growing consumer concern over climate change. A slippery slope, “Certification in general is kind of a false promise, and that’s this greenwashing license,” George Harding-Rolls, campaign director for the nonprofit Changing Markets Foundation, told Quartz, noting that “certification programs like the Higg Index” – and other labeling initiatives – often trivialize the amount of change the fashion industry must go through to become sustainable. ”

Ahead of the latest round of pushbacks, Allbirds was the victim of a bogus publicity lawsuit last year for allegedly failing to address claims it makes in its sustainability-focused marketing, including those about carbon footprint of its popular shoes, which it measures using a proprietary life cycle assessment tool and the Higg MSI. While plaintiff Patricia Dwyer took issue with the footprint measurement tool, arguing that her calculations are based “on ‘the most conservative assumption for each calculation, skewing the calculations in her favor’, so [Allbirds] can make larger environmental claims,” a federal court in New York dismissed the case this spring. Reviewing Allbirds’ environmental impact claims, Judge Cathy Seibel of the U.S. District Court for the Southern District of New York said in April that “criticism of Dwyer [is] of the tool’s methodology,” not with Allbirds’ statements about its products, leaving the sneaker maker off the hook.