We all understand the significance of reducing our carbon footprint and opting for eco-friendly choices, but why is it so challenging? Despite daily messages stressing the importance of environmental protection, consumers still grapple with making green purchasing decisions. Based on the work of Shreedhar, Moran and Mills (2023), this article examines a hindrance to green decision-making—confusing eco-labeling—and argues that the private sector can play a pivotal role in tackling sludge and promoting well-informed green behavior.

What is Sludge and Why Does it Matter?

Behavioral science insights find various applications, from marketing to crafting effective government policies. While the focus of both firms and governments is typically on nudges—interventions in choice architecture that predictably alter decision-making—sludge has received less attention. Sludge can be defined as frictions or burdens impeding behaviors, essentially a transaction cost in choice architecture.

Brown sludge is a specific type that hinders green behavior. It encompasses factors like poor policy design, legacy sludge, and greenwashing, occurring at individual, social, and institutional levels. This article concentrates on sludge at the individual decision-making level, exploring what happens when people choose products at the store.

How Confusing Eco-Labels Can Create Sludge at the Consumer Level

Conventional theory suggests that eco-labels efficiently promote green decision-making. Studies indicate that green consumers are motivated by the personal “warm glow” effects of environmentally friendly products. An eco-label signals to consumers that a product possesses green credentials, motivating them to make an informed pro-environmental purchase. This system works when consumers are well-informed and the information conveyed in eco-labels is accurate.

However, reality becomes murky when eco-labeling turns into sludge, being confusing, vague, false, and hard to verify. This challenge intensifies considering the multitude of eco-labels on the market; the Eco-Label Index tracks 456 eco-labels across 25 sectors in various countries, with the UK alone having 87. The abundance of eco-labels leads to uncertainty, time costs, and difficulty for consumers in distinguishing certifiable labels from non-certifiable ones.

Eco-labeling confusion is compounded when not all eco-labels are independently certified. Labels like Fairtrade have independent certification, while others like Procter and Gamble’s ‘Future Friendly’ label lack independent verification. Misleading packaging further adds to the confusion by triggering pro-environmental associations with features like green colors and happy animals.

These issues create ‘moral wriggle room’ for consumers. If uncertainty surrounds the validity of an eco-label, why choose an eco-labeled product at all? Even if green consumers are willing to buy eco-friendly products, evaluation costs can make the decision time-consuming.

How the Private Sector Can Help

While standardizing eco-labels is a vast challenge, individual firms can contribute to alleviating the problem. Clear and transparent messaging is the first step. When adopting environmentally friendly practices, firms should ensure that packaging effectively communicates the benefits of those practices. An example of effective eco-labeling is seen in Western Dairies’ ultra-pasteurized milk in the Belize market. The eco-label is prominently placed near nutritional information and is easily understandable for the average consumer.

Another measure to combat sludge is clear communication in advertisements. While there is broad acceptance that pro-environmental behavior is good, marketing campaigns should make efforts to explain  why a product is environmentally friendly.

Conclusion

Brown sludge manifests in various forms and affects individual behavior on multiple levels. From confusing eco-labeling to poor policy design, sludge offers an effective framework for examining obstacles to adopting green behavior. Firms can actively contribute to combating sludge by ensuring that eco-messaging is clear, consistent, and accessible.