Sustainability labeling for businesses: an investment in the future

Sustainability has evolved from a passing trend to an absolute necessity for companies aiming to be competitive and successful in the long term. In today's business climate, it is no longer enough to simply offer quality products or services. Companies also need to demonstrate their commitment to making a positive impact on the world. Therefore, sustainability labeling represents an investment in the future. Businesses can demonstrate this commitment by actively pursuing sustainability labeling. Labeling means that companies take steps to ensure that their products or services meet certain environmental, social and economic standards. By doing so, companies can not only contribute to a more sustainable world, but they can also achieve significant business value. Sustainability labeling can help companies to:

• increase customer loyalty
• improve brand image
• effectively manage risks
• attracting and retaining the best people

In addition, sustainability labeling can help improve a company's financial performance and create long-term value overall.

Increased customer loyalty

According to a study published in the Journal of Business Ethics, companies that engage in sustainability have higher customer loyalty. This is because customers feel a stronger connection to companies that share their values, especially when it comes to environmental issues. One company that has managed to create this strong connection with its customers is Patagonia, an American clothing company known for its strong commitment to the environment. Patagonia has long been an advocate for sustainability, and this is reflected in everything they do, from the materials they use to the initiatives they support. Patagonia has several sustainability labels for its products, such as Regenerative Organic Certified® Programs, Global Organic Textile Standard (GOTS), bluesign®, and Certified B Corporation. One way Patagonia has demonstrated its commitment is by offering repairs and recycling of its products. By offering these services, Patagonia encourages its customers to think twice before throwing away their old clothes. Instead, they can have them repaired or recycled, which is not only good for the environment, but it also helps customers save money. This strategy has proven to be very successful for Patagonia. By showing that they care about the environment and their customers' wallets, Patagonia has managed to create strong bonds with their customers. This has resulted in increased loyalty and sales. Customers know that when they buy from Patagonia they are supporting a company that shares their values.

Improved brand image

One company that has seen significant benefits from implementing sustainability labeling is Unilever. By actively working on sustainability labeling for its products, Unilever has managed to improve its brand image. Unilever has long been committed to sustainability issues and has taken several initiatives to reduce its environmental impact. But it is by introducing sustainability labels for its products that Unilever has been able to truly communicate this commitment to its customers. Examples of sustainability labels include FSSC 22000, FSC, PEFC and the EU Flower. In addition, Unilever itself has developed sustainability labels, such as:

• Unilever Sustainable Agriculture Code (SAC): A set of best practice principles for agriculture to make farms more sustainable.
• Unilever Regenerative Agriculture Principles (RAPs): Provides guidance on how to care for the soil, capture carbon, and restore and recreate the land.
• Unilever Responsible Partner Policy: Sets out Unilever's commitment to responsible, transparent and sustainable business.

The sustainability label serves as a clear indicator to consumers that the product meets certain sustainability criteria. By clearly displaying this label on its products, Unilever effectively communicates its commitment to sustainability to customers. The result of this has been an improved brand image. Consumers today are aware of environmental issues. Many prefer to buy products from companies that they perceive as sustainable. By demonstrating that it takes sustainability seriously, Unilever has been able to differentiate itself from its competitors and strengthen its brand. Unilever has seen that its commitment to sustainability has also led to increased sales and market share.

Effective risk management

Sustainability labeling can serve as an effective risk management strategy for companies. It allows companies to ensure that their supply chains meet environmental and social standards. In doing so, companies can reduce the risk of surprise scandals and loss of customer trust. One company that has used sustainability labelling in this way is IKEA. IKEA's complex supply chain spans many countries and regions. This means that they face a range of potential risks, from labor rights issues to environmental impacts. To manage these risks, IKEA has introduced a comprehensive sustainability label for its products. This includes FSC, Water Stewardship and the Better Cotton Initiative, as well as its own sustainability programmes and principles (SAC and RAP). This label shows that the products have been produced in a way that meets IKEA's sustainability standards. These cover everything from working conditions to environmental impact, and they ensure that IKEA suppliers meet certain minimum requirements. By introducing this sustainability label, IKEA has been able to reduce the risk of scandal and loss of customer trust. If a supplier does not meet IKEA's standards, they can quickly identify the problem and take action to resolve it. This helps IKEA to nurture its brand and ensure that its customers can trust that they are buying sustainable products.

Attracting and retaining the best people

In today's dynamic labor market, it is more important than ever to attract and retain the best employees. According to a study by Harvard Business Review, today's employees prefer to work for companies with a strong commitment to sustainability. Adidas has used this to its advantage. Through a strong commitment to sustainability, Adidas has managed to attract individuals who are interested in making a difference in the company and in the world. An important part of Adidas' commitment to sustainability is the use of sustainability labels. For example, Adidas has Better Cotton Initiative certification for its cotton production. This certification shows that Adidas cotton products meet strict environmental, social and economic standards. In addition, Adidas is committed to becoming climate neutral. Adidas also strives to create an inclusive work environment where everyone feels valued and respected. By combining these factors, a strong commitment to sustainability, an inclusive work environment and the use of sustainability labels, Adidas manages to attract and retain some of the most talented individuals in the industry.

Increased profitability with sustainability labeling

Above all, sustainability labeling is an investment in the future. Therefore, actively working on sustainability labeling can bring significant business value to companies. This is because it both contributes to a more sustainable world and strengthens the company's market position.

• Sustainability labeling can help increase customer loyalty
  Customers today are more aware than ever of environmental issues. Many prefer to buy products from companies they perceive as sustainable. By demonstrating that they take sustainability seriously, companies can create a strong connection with their customers. This leads to increased loyalty and sales.
• Sustainability labeling can help improve a company's brand image
  In an increasingly competitive market, companies that demonstrate a strong commitment to sustainability can differentiate themselves from their competitors and strengthen their brand.
• Sustainability labeling can serve as an effective risk management strategy
  By ensuring that supply chains meet certain environmental and social standards, companies can reduce the risk of scandal and loss of customer trust.
• Sustainability labeling can help companies attract and retain employees
  Today's workforce prefers to work for companies that are committed to sustainability. In this way, a company with a strong sustainability focus can both retain and attract the best employees.

In conclusion, working actively with sustainability labeling is a good investment that both benefits the planet and increases the company's long-term profitability.

Choose sustainability labels that make a difference

At a time when every company's sustainability profile is under scrutiny, we face a jungle of different labels. With a plethora of international and national sustainability labels, it is a challenge to separate the wheat from the chaff. However, it is not the number of labels that defines success, but the relevance and impact they have on both business and customers. Research underlines the importance of choosing labels that actually contribute to corporate sustainability goals and economic well-being. Below you will find a list of selected sustainability labels that can make a real difference for your business:

The logo	Sustainability labeling	Short description
	Better Cotton Initiative	The BCI promotes production principles and criteria for socially, environmentally and economically sustainable cotton farming.
	Der Blaue Engel	Der Blaue Engel is Germany's eco-label for environmentally friendly products and services
	bluesign standard	The Bluesign® standard reduces the ecological footprint of the textile industry through Input Stream Management
	Good Environmental Choice	Good Environmental Choice focuses on environmentally friendly products and services with strict criteria
	EU Ecolabel	The EU Ecolabel is a voluntary scheme that promotes environmentally friendly products and services
	EU energy label	EU energy label must be displayed on all new household products on sale
	EU organic products	The EU organic product label indicates that at least 95% of the ingredients are organic
	Fairtrade	Fairtrade is an ethical trading system that supports small-scale producers and fights poverty
	FSC (Forest Stewardship Council)	FSC promotes sustainable forest management, certifies well-managed forests and traces certified material from forest to consumer
	GOTS (Global Organic Textile Standard)	GOTS unifies standards for organic textile production and requires certified organic fibers
	Global Recycle Standard	Global Recycle Standard certifies products with recycled content and responsible production
	The Green Dot	"The Green Dot identifies products from producers that contribute to packaging recycling
	KRAV	KRAV develops organic standards and promotes the KRAV label for sustainable production
	LEED	LEED promotes global adoption of sustainable building and development practices
	MSC (Marine Stewardship Council)	The MSC fishery standard ensures sustainable fish stocks, minimal environmental impact and effective management
	The Nordic Swan	The Nordic Swan or Nordic Ecolabel shows that a product is a good environmental choice
	PEFC (Program for the Endorsement of Forest Certification)	PEFC promotes sustainable forest management and certifies forests through independent third-party audits
	Rainforest Alliance Certified	Rainforest Alliance Certified™ guarantees environmentally friendly and socially responsible products
	Recycled content	The symbol indicates recycled content or that the product can be recycled, not certification.

Source: Ecolabel Index

Anchor supports you in your journey to a sustainable future and business

At Anchor Management Consulting, we can support you in the entire journey from developing your circular ambition, through analyzing gaps and helping to create and prioritize your roadmap, to supporting the implementation of your successful circular changes. Initially, we like to start with a Quick Assessment. This means that within a limited timeframe and at a fixed cost, we review your company's current and desired state of sustainable business and create a clear roadmap for change. Whether it's creating a sustainable business, removing barriers to growth, implementing new technology or improving processes, we'll make sure to support you in making it happen for real. Get in touch to discuss how we at Anchor can help you and your business become even more circular, sustainable and successful!