The Truth Behind Food Labels: Can They Really Lead to a Greener Future?

The OECD report highlights the rise of simplified environmental food labels aimed at guiding consumers toward sustainable choices while encouraging greener production practices. However, inconsistencies in measurement, potential greenwashing, and limited consumer impact necessitate stronger international standards, transparency, and policy support for effectiveness.

The OECD’s latest analysis, Enabling Trust in Food Labels for Improved Environmental Outcomes, explores the growing trend of simplified environmental food labelling and its potential to guide consumers toward sustainable choices while encouraging producers to adopt greener practices. Conducted in collaboration with the European Commission, IPCC, IPBES, and various academic institutions, the research highlights the rapid rise of front-of-pack environmental labels designed to communicate aggregated environmental impacts. However, despite their proliferation, these initiatives lack harmonization in what they measure and how they measure it, raising concerns about their effectiveness and credibility. The absence of standardized methodologies and comprehensive impact assessments poses a challenge to their reliability, creating the risk that consumers may be misled or that businesses may lack sufficient incentives to shift toward sustainability. The report underscores the pressing need for coherent policies, international collaboration, and evidence-based decision-making to ensure that such labelling schemes achieve their intended outcomes.

The Environmental Footprint of Food Production

Food production is a significant contributor to climate change, deforestation, biodiversity loss, and excessive water use. However, not all food products have the same environmental impact—differences arise based on farming techniques, resource usage, and geographical conditions. Within the same product category, producers can have vastly different environmental footprints. Recognizing this variation, policymakers and researchers have sought ways to inform consumers about these differences through labelling. Traditional labels, such as organic or fair-trade certifications, have long existed, but a new wave of simplified environmental labels is emerging. These front-of-pack indicators aim to provide easily digestible information about a product’s overall environmental impact through rating systems such as letter grades or numerical scores. While the idea is promising, significant challenges remain in ensuring these labels are transparent, reliable, and genuinely informative for consumers.

The Challenge of Confusing and Misleading Labels

Despite their potential, environmental labelling schemes face major hurdles. One of the primary issues is inconsistency in measurement methodologies. Some schemes rely on life-cycle assessments (LCA), a widely accepted scientific approach that evaluates environmental impact across multiple categories such as carbon footprint, water use, and biodiversity. The European Commission’s Product Environmental Footprint (PEF) framework serves as a reference for many initiatives, but additional factors such as pesticide use, packaging materials, and seasonality are sometimes included, leading to inconsistent standards. This lack of uniformity risks confusing consumers, undermining trust in environmental claims, and limiting the effectiveness of these labels in influencing purchasing decisions.

A growing concern is the proliferation of vague and misleading environmental claims. Many food products now feature labels with broad terms like “eco-friendly” or “green,” yet these claims are often unverified. This contributes to greenwashing, where companies make deceptive claims about sustainability without substantial evidence. Regulators in some countries are beginning to address this issue. For example, France has proposed a mandatory regulatory framework to standardize environmental labelling, ensuring that specific environmental impacts are covered and measured consistently. However, more global efforts are needed to establish a trustworthy system that prevents misleading claims and helps consumers make truly sustainable choices.

Consumer Behavior and the Role of Labels

While simplified environmental labels are designed to help consumers make informed choices, research suggests their direct impact on purchasing decisions may be limited. Studies indicate that price, taste, freshness, and nutritional value remain the most important factors when choosing food, with environmental concerns ranking lower. Additionally, many consumers find sustainability-related information too complex to understand or apply in real-world shopping situations. An audit by the European Court of Auditors found that existing food labels often confuse rather than clarify, reducing their ability to influence purchasing behavior effectively.

However, even if consumer response to environmental labels is modest, they could still drive sustainability by influencing the supply side. Similar to how nutrition labels have led to healthier food reformulations, environmental labelling may encourage producers to adopt greener practices. Companies striving for higher ratings may invest in lower-carbon production techniques, better water management, or biodiversity-friendly farming. Yet, this shift will only happen if businesses trust the credibility of the labelling systems and believe consumers will respond positively to them. Without strong enforcement and clear standards, producers may not have sufficient motivation to make meaningful changes.

The Path Forward: Policy Actions for Effective Labelling

To address these challenges, the OECD recommends several policy actions. Governments must collaborate to develop a strong evidence base that ensures environmental labels reflect actual, rather than average, impacts. Investing in accurate data collection and verification mechanisms is crucial for maintaining credibility. International cooperation is also necessary to prevent a fragmented approach, which could create trade barriers and inconsistencies across markets. Public-private partnerships can play a key role in making different labelling schemes more interoperable, reducing costs for businesses and improving consumer confidence.

Another critical step is conducting real-world experiments to assess how consumers interact with environmental labels and how producers respond to them. Controlled laboratory studies often overestimate the impact of labels, whereas real-world trials can provide more realistic insights into their effectiveness. Policymakers should also offer clear guidelines to businesses on substantiating environmental claims and strengthen monitoring systems to prevent greenwashing. Implementing strict penalties for misleading information will further reinforce trust in labelling initiatives.

Transparency and inclusiveness are essential for ensuring the success of environmental labelling. The decision-making process should incorporate input from small-scale producers, especially in developing countries, as well as from civil society organizations and academic experts. While achieving broad consensus may slow down policy development, it is crucial for building legitimacy and public trust. By including diverse perspectives and ensuring that smaller food producers are not disadvantaged, policymakers can create a fair and effective system for environmental labelling.

Ultimately, simplified environmental food labels are not a standalone solution to the sustainability crisis, but they can be a valuable part of a broader strategy. Their success will depend on their ability to provide clear, reliable, and actionable information to consumers while also driving meaningful change in food production practices. Strong policy frameworks, international cooperation, and a commitment to scientific rigor and transparency are essential for making these labels a credible and effective tool in the fight for a more sustainable food system.