False promise or promise with a fault : deciphering the effectiveness of eco-label governance in the german textile market

Abstract: An understanding of the inherent effectiveness-potential of environmental product-labels is important because of the growing presence of these labels as governance regimes, especially in the textile market. The proper governance of eco-labels has the potential to assist with the transformation to more environmentally friendly consumption, but not enough is known about the inherent qualities that make a label effective or ineffective in communicating scientific environmental information. In this thesis, I study eco-labels and their potential effectiveness as a governance mechanism towards more sustainable consumption. Specifically the study encompasses six labels present in the German textile market with the aim to evaluate their inherent effectiveness- potential in conveying environmental information to consumers. Empirical material was constructed by rating each of the four indicators: credibility, salience, legitimacy and awareness, on a Likert scale for each eco-label. The data to inform this rating resulted from a review of the available scientific and organizational literature. The results have been visualized using data tables and radar diagrams. The results of this study accumulate to show that the eco-labels considered here simply tell an ineffective story to the consumer! They have a low overall effectiveness-potential in conveying information regarding the sustainability of textiles. No label considered in this study attained more than 67% of its total potential effectiveness showing that there is a large gap between the prospects of this governance scheme and the way it is currently functioning. The lowest overall performer is the Fairtrade® textile label. The Non-State-Market-Driven (NSMD) governance system has a series of shortcoming that are partly responsible for this poor performance. A revised, theoretical governance approach combining decentralization theory with incorporated transgovernmentalism is proposed with the intent to maximize the positive and minimize the negative qualities of the NSMD model. Furthermore, this study shows that the current approach to eco-labeling falls short in the knowledge creation process for the consumer. This is due to the lacking cohesion of the message they portray. This study is important because it addresses a knowledge gap that exists within the field of product labeling. Simultaneously this study identifies key shortcomings that eco-labeling organizations can take advantage of to enhance their effectiveness and increase sustainability in the textile market.