The evolving landscape of consumer trust

March 22, 2019

The availability of clear product-related environmental information plays an important role in stimulating consumer trust. Consumers derive such information largely from ecolabels and certifications. However, the effectiveness of these ecolabels is diminishing. In the meantime, consumer demand for transparency is intensifying and data-driven technologies (e.g. blockchain) are creating opportunities for alternative systems that are not based on a specific label, but on hard evidence from data and on governments that take control in defining the boundary between responsible and irresponsible products and practices. In sum, the landscape of transparency and traceability is changing, which not only creates opportunities for new systems, but also for new actors to take control.

Our observations

  • As we have noted before, the concept of sustainability has been gaining traction with an ever-larger group of people and has begun to impact decision–making on all societal levels. Consumers are increasingly concerned about the negative environmental impacts of the goods they purchase, partially due to the lack of transparency regarding a product’s origin and production process.
  • 72% of millennials are already willing to pay a price premium for a product that they trust or perceive to be sustainable and academics have found that the availability of product environmental information leads to higher trust and responsible purchasing behavior by consumers. In a similar vein, the Edelman Trust Barometer of 2017 revealed how activities linked to sustainability significantly help enhance trust.
  • Recognizing the plethora of environmental challenges, numerous transnational rule-setting organizations (e.g. FSC, Global GAP, Fairtrade) emerged in the 1990s to foster sustainable practices across 25 industries worldwide, using mechanisms of certification and labelling. For instance, the Forest Stewardship Council (FSC) sets standards for responsible forest management and forest products by labelling them as ecofriendly with their FSC label, seen on many paper products. By December 2018, the FSC had issued 1,606 certificates in 85 countries,thereby protecting 200,963,183 Ha of forest worldwide.
  • The number of ecolabels and certificates has increased from about 50 in the early 1990s to 463 today. Most of these labels are privately owned (non-governmental) and apply to the food industry (32%).
  • According to the OECD, there is a trend of firms developing their own labelling schemes (e.g. Starbuck’s C.A.F.E. Practices) in order to streamline environmental communication and minimize the excess costs of managing multiple labels, while retaining control over the standard used.
  • The growth of ecolabels has been plateauing slowly since 2010, due to the increasing complexityof certification and labelling programs. Specifically, consumers face difficulty differentiating between criteria and meanings behind the endless array of labels. Firms are confronted with the staggering costs of adopting multiple labels and managing the accompanied complexity across their supply chains, whilst small agricultural farmers are put out of business because they cannot finance the myriad of strict requirements of the global north.
  • Several experts have been questioning the effectiveness of ecolabels and certifications, pointing out the lack of an apparent standard, the immense discrepancy in quality-levels between schemes, and the aforementioned negative externalities.
  • The increasing availability of data is opening alternative routes to ensuring trust and transparency in products for consumers. For instance, companies such as IBM Food Trust and Circularise use blockchain technology to increase traceability or material supply chains, which could, in turn,tackle grey markets and trigger further innovations. Indeed, the blockchain and traceability market is experiencing significant growth – especially in the food sector – with many parties aiming to create an overarching data platform to make comparison easier.

Connecting the dots

​Seeing as consumers are increasingly concerned about the environment, more and more companies have acknowledged that sustainability must become part of their business model. Yet, due to the enormous backlash to greenwashing, firms began integrating ecolabels in order to externally validate the responsibility of their products, which has also partially led to the enormous growth in ecolabels over the past decades. However, their plan to stimulate consumer trust might be backfiring due to the multiplicity of labels. Ecolabels and certifications have hitherto adhered to the dominant design of “governance of sustainability”, which refers to the purposeful and authoritative steering of societal processes by political actors towards sustainability. Now, the landscape is slowly changing, as indicated by the plateauing growth of ecolabels, the rise of data-oriented companies for traceability, the tendency of firms to develop their own labels, and society’s anticipation of government action for sustainability. These changes give rise to important questions about the future of the governance of sustainability, such as what system will successfully meet our global sustainability challenges and who will be leading such a system; three possible scenarios emerge.
First, the current system of privately-owned ecolabels and certificates will remain the dominant design, but in a much more consolidated form. Here, businesses or multi-stakeholder groups (without government involvement) set standards within an industry to address sustainability issues. In this context, the emergence of platforms with reputation systems (such ascurrent platforms that compare health insurances) could not only lead to the elimination of low-quality ecolabels, but could also generate sufficient data to strengthen the distinction between high- and low-quality labels by means of hard evidence. In contrast to governmental interventions (e.g. eco-taxation), these schemes are voluntary in nature and rely on market forces and public scrutiny to exert pressure, which means that which ecolabels are “good” and which are “bad” would be determined in a democratic manner.

Second, data-oriented companies such as IBM Food Trust will substitute the current dominant design. Both the airtight image of blockchain and the heightened accuracy of using data for traceability and transparency purposes could significantly favor these contemporary companies over ecolabels and certificates. Yet, these technologies do not inform what distinguishes good products and practices from the harmful ones; they only unravel a product’s material supply chain by collecting and processing data. So, who determines what is good and bad? Possibly, governments could respond to society’s call for action by taking on this responsibility. Indeed, recent events such as climate marches and the Urgenda case show society’s dissatisfaction with governmental inaction. Governments are only slowly adopting a new system of governance of sustainability (e.g. eco-taxation). This could provide them with critical control over businesses and consumers to meet climate agreements. Nevertheless, private actors will most likely protect their current position, making it an interesting question who will control the future of governance of sustainability.

Third, with enough data available, companies (i.e. manufacturers or retailers) would be able to inform consumers about the environmental impact of their products. In this case, the system would eliminate the aforementioned data-oriented technological firms because manufacturers or retailers would make use of their own datasets directly. Specifically, product environmental information would be organized and matched to particular requirements articulated by governments or businesses themselves (if they have enough consumer trust). This would allow governments to reap similar benefits as with the previous avenue (i.e. government control).
No matter which scenario awaits us in the years to come, the challenges of our current ecolabel system in combination with the increasingly pivotal role of data-oriented technologies in providing transparency and traceability are definitely going to change the landscape. This creates interesting opportunities, not only for the role of data and technology, but also in terms of power shifts between private (i.e. businesses and multi-stakeholder groups) and public (governments) actors.  


  • With consumers demanding more and more transparency, the demise of our current ecolabel system is problematic on the one hand, but creates striking opportunities on the other hand. With the abundance of labels, drawing a clear line between good and bad ecolabels – or good and bad practices/products – will become critical.
  • Influencing what distinguishes responsible from irresponsible products could significantly strengthen government control over industries and consumer purchasing behavior, which could help countries meet their climate goals. This can only happen if the current plethora of ecolabels fails to consolidate. A clearer standard set by the public would also push companies towards more aggressive innovation to meet such specific requirements. While it is equally possible that private actors will remain in control, it is likely that this would result in less aggressive innovation for sustainability and thus less sustainable achievements.
  • The increasing collection and exploitation of data within companies and their supply chainsopens opportunities to speed up the consolidation process of all ecolabels, not only because it will be easier to compare the different labels, but also because it will strengthen the position of data-oriented companies such Circularise.

Series 'AI Metaphors'

1. The tool
Category: the object
Humans shape tools.

We make them part of our body while we melt their essence with our intentions. They require some finesse to use but they never fool us or trick us. Humans use tools, tools never use humans.

We are the masters determining their course, integrating them gracefully into the minutiae of our everyday lives. Immovable and unyielding, they remain reliant on our guidance, devoid of desire and intent, they remain exactly where we leave them, their functionality unchanging over time.

We retain the ultimate authority, able to discard them at will or, in today's context, simply power them down. Though they may occasionally foster irritation, largely they stand steadfast, loyal allies in our daily toils.

Thus we place our faith in tools, acknowledging that they are mere reflections of our own capabilities. In them, there is no entity to venerate or fault but ourselves, for they are but inert extensions of our own being, inanimate and steadfast, awaiting our command.
Read the article
2. The machine
Category: the object
Unlike a mere tool, the machine does not need the guidance of our hand, operating autonomously through its intricate network of gears and wheels. It achieves feats of motion that surpass the wildest human imaginations, harboring a power reminiscent of a cavalry of horses. Though it demands maintenance to replace broken parts and fix malfunctions, it mostly acts independently, allowing us to retreat and become mere observers to its diligent performance. We interact with it through buttons and handles, guiding its operations with minor adjustments and feedback as it works tirelessly. Embodying relentless purpose, laboring in a cycle of infinite repetition, the machine is a testament to human ingenuity manifested in metal and motion.
Read the article
3. The robot
Category: the object
There it stands, propelled by artificial limbs, boasting a torso, a pair of arms, and a lustrous metallic head. It approaches with a deliberate pace, the LED bulbs that mimic eyes fixating on me, inquiring gently if there lies any task within its capacity that it may undertake on my behalf. Whether to rid my living space of dust or to fetch me a chilled beverage, this never complaining attendant stands ready, devoid of grievances and ever-willing to assist. Its presence offers a reservoir of possibilities; a font of information to quell my curiosities, a silent companion in moments of solitude, embodying a spectrum of roles — confidant, servant, companion, and perhaps even a paramour. The modern robot, it seems, transcends categorizations, embracing a myriad of identities in its service to the contemporary individual.
Read the article
4. Intelligence
Category: the object
We sit together in a quiet interrogation room. My questions, varied and abundant, flow ceaselessly, weaving from abstract math problems to concrete realities of daily life, a labyrinthine inquiry designed to outsmart the ‘thing’ before me. Yet, with each probe, it responds with humanlike insight, echoing empathy and kindred spirit in its words. As the dialogue deepens, my approach softens, reverence replacing casual engagement as I ponder the appropriate pronoun for this ‘entity’ that seems to transcend its mechanical origin. It is then, in this delicate interplay of exchanging words, that an unprecedented connection takes root that stirs an intense doubt on my side, am I truly having a dia-logos? Do I encounter intelligence in front of me?
Read the article
5. The medium
Category: the object
When we cross a landscape by train and look outside, our gaze involuntarily sweeps across the scenery, unable to anchor on any fixed point. Our expression looks dull, and we might appear glassy-eyed, as if our eyes have lost their function. Time passes by. Then our attention diverts to the mobile in hand, and suddenly our eyes light up, energized by the visual cues of short videos, while our thumbs navigate us through the stream of content. The daze transforms, bringing a heady rush of excitement with every swipe, pulling us from a state of meditative trance to a state of eager consumption. But this flow is pierced by the sudden ring of a call, snapping us again to a different kind of focus. We plug in our earbuds, intermittently shutting our eyes, as we withdraw further from the immediate physical space, venturing into a digital auditory world. Moments pass in immersed conversation before we resurface, hanging up and rediscovering the room we've left behind. In this cycle of transitory focus, it is evident that the medium, indeed, is the message.
Read the article
6. The artisan
Category: the human
The razor-sharp knife rests effortlessly in one hand, while the other orchestrates with poised assurance, steering clear of the unforgiving edge. The chef moves with liquid grace, with fluid and swift movements the ingredients yield to his expertise. Each gesture flows into the next, guided by intuition honed through countless repetitions. He knows what is necessary, how the ingredients will respond to his hand and which path to follow, but the process is never exactly the same, no dish is ever truly identical. While his technique is impeccable, minute variation and the pursuit of perfection are always in play. Here, in the subtle play of steel and flesh, a master chef crafts not just a dish, but art. We're witnessing an artisan at work.
Read the article

About the author(s)

You may also like