Stringency, governance, media coverage and diffusion of environmental and social labeling schemes

Co-authored by: Pavel Castka and Charles J. Corbett

The increased focus on social and environmental issues has led to a range of labels being used to inform consumers about relevant aspects of products and processes. The diffusion of these labeling schemes or “ecolabels” such as FSC, USDA Organic or FairTrade has been widespread, though adoption of individual labels has varied widely. We examine how diffusion of ecolabels depends on their stringency, their governance, and the way they are portrayed in the media, using data on 41 labels from 67 experts and 3043 media articles. We find that governmental control and accreditation of verifiers are the only attributes that (partly) predict overall quality of governance as perceived by experts; that better-governed labels are more widely adopted but that more stringent labels within our sample are not less widely adopted; that open and consensus-based standard-setting is associated with more favorable media coverage; and that more favorable coverage does not contribute to wider adoption.