The European Union's Eco-Label application has emerged to help consumers distinguish between products and services. The application enables the consumer to understand where, when and under what conditions a product or service was produced. It publicly discloses the product's in-use performance and the cycle that includes its post-use disposal or reuse.
The concept of Eco-Label started to be discussed by the European Commission in 1987, which was declared the European Year of the Environment. The "Eco Label" system, enacted in 1992 and legalized, became rich in 2000 and took its current form in 2009. As of the end of 2011, more than 1300 licenses have been granted. It has been announced that there are Eco Label labels on more than 17,000 products. Eco-Label, within the EU, provides compatibility with Environmental Action Program, Eco Design in Energy-Consuming Products, and Sustainable Development Strategies. The benefits of the Eco-Label have attracted the attention of many manufacturers wishing to sell their products in Europe.
Since the application is voluntary, there are no commercial barriers. Many manufacturers have realized that the application creates a way out of the competitive environment and provides advantages. In addition, due to the GPP (Green Purchasing Criteria) practices, the Eco-Label criteria have also started to be included in the tender specifications. The label is given by the European Union Eco-Label Board, which is an independent body that considers all the ecological and production stages. All stages, from raw material selection to production, distribution, consumption, and recycling when used, are considered in determining the steps.
Why is the Eco-Label necessary?
Transparency has begun to shape production, trade, and ways of doing business. How, where, and under what conditions the products are produced and the process from post-production transportation to recycling attract consumers' attention. For this reason, monitoring the entire life cycle of products with reliable, precise data and standards has become mandatory. However, the Eco-Label application goes beyond the required processes. Sustainable companies are increasingly adopting the Eco-Label as a way of doing business, making it one of the essential elements of commercial activity. Risk Management, access to the market network, reputation, and instability, which are the main points for a sustainable company to do business on a global scale, are in parallel with the Eco-Label application. The Eco-Label is one of the keys for companies that think with ESG logic to reduce risk, increase opportunities, continuity in markets, and entry into new markets.
In sizeable international business risk analysis studies, Climate Change is among the social and economic risks. Water, raw material constraints, deforestation, ecosystem, and biodiversity problems pose a significant risks for companies and society.
Eco-Label, which is applied in many topics, from food to energy, packaging to tourism, is extremely important in risk management. Eco-Label is one of the crucial tools for companies to develop their business models in their field. Problems in production processes, errors in raw material preferences, and precautions are taken about wrong logistics application decisions provide companies with significant advantages in the medium and long term. Thanks to the Eco-Label application, all areas of companies, such as production, marketing, logistics, human resources, and supply chain, can be examined in detail. Improvement and development of processes will provide innovative increases.
Eco-Label makes a positive contribution by monitoring the entire life cycle of a product, from the raw material producers to the minor supplier, by monitoring the environmental and social impacts. Eco-Label impacts efficiency and cost management, not only within the companies themselves but also for all the points they are in contact with and touch.
Eco-Label also increases the interest of national and international investors in companies. The essential elements determining investors' investment decisions are environmental and social risks and profit increases. In recent years, Stock Indices have begun to emerge globally, measuring how companies manage their social and ecological sustainability.
Indices such as FTSE4Good, Dow Jones Sustainability Index (DJSI), and Borsa Istanbul Sustainability Index became operational, enabling public companies to explain how they manage their environmental and social risks and follow their sustainability efforts. Studies on the indices clearly show that the companies in the top ranks are institutions that have made significant progress in environmental management systems and ecological product labeling, namely Eco-Label.
Author:
Çağın Ergün
Source:
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https://dergipark.org.tr/tr/download/article-file/704401