Blockchain technology – a new era of ecolabelling schemes?

Author:Michaela A. Balzarova
DOI:https://doi.org/10.1108/CG-08-2020-0328
Pages:159-174
Publication Date:02 Dec 2020
Blockchain technology a new era of
ecolabelling schemes?
Michaela A. Balzarova
Abstract
Purpose This paper aims to investigate the potential of blockchain technology (BCT) for
enhancing the effectiveness of ecolabelling schemes (ecolabels). The paper examines ecolabels’
effectiveness acrossthree criteria reducing adver se environmental and social impacts, enhancing
quality and safety standards during production and service delivery and increasing producer’s
trading power via decreased information asymmetry. These three categories are compared with
technology’s status quo, linking use cases relevant to the enhanc ement of contemporary ecolabels’
effectiveness. Conclusions are drawn over BCT’s potential for enhancing the effectiveness of
ecolabels. The paper also offers directions for f uture research related to BCT and purpose-driven
ecolabels.
Design/methodology/approach This study adopted a qualitative interpretivist approach to
investigate the potential BCT represents for enhancement of the effectivenessof ecolabelling schemes
(ecolabels). The paper identifies three criteria against which ecolabels can be assessed in respect to
their effectiveness.Additionally, it looks for linkages betweenthe design of ecolabels and a creation and
utilisation of improved practices in a given industry. This conceptual literature review resulted in a
framework for ecolabels’ effectiveness and a lens to review BCT-related literature with potential to
enhanceecolabels’ design and trading practices.
Findings There is an undeniableshift in attitude towards the adoption ofBCT, stepping away from the
naı
¨
ve notion thatBCT can fix all the problems encounteredin a supply chain. On the one hand, BCT offers
to better inform consumers of the green benefits ecolabelled products provide. On the other hand, a
broader applicationof BCT currently faces a trilemma of challenges relatedto issues of decentralisation,
security and scalability. BCT’s presence is likely to force ecolabelling organisations to review their
positionon the market and their intended purposein the marketplace.
Research limitations/implications This paper is based on a conceptual literature review and
derives with three key themes grouping ecolabels against their efficiencies. These themes provide
scope for a search of relevant blockchain-embedded use cases that may or may not contribute to the
enhancement of ecolabels’ impact. This is a conceptual, theoretical review of possible approaches
that can be adopted by commerce with predictions relevant to ecolabels. This paper does not claim
any empirical findings.
Practical implications Despite interestBCT gained to date, the technology still deals with unresolved
issues relatedto decentralisation, scalability and security.Many studies advise caution, and some do not
view the technology as disruptivebut foundational. The paper provides referencesto studies that assist
organisationswith a decision, whether it is the right time to investin BCT or not.
Social implications This paper adds to the ambitionmost ecolabels strive for, and that is to mitigate
adverse environmental and social impacts production of conventional products may have. Use cases
embedded in BCT offer insights into the impacts of enhanced transparency within supply chains. For
example, BCT is likely to work well for improving the lives of those producing the foods we eat while
informingon issues such as child labour or planting of new trees as part of an offset program.
Originality/value This paper’s contribution is manifold. First, it delivers a qualitative conceptual
analysis of principal ecolabels against their stated purpose. Second, it reviews the BCT literature and
identifies cases that are able to provide perspective on the technology’s relevance to ecolabels’
effectiveness. Third,by exploring the overlap of the two concepts, this paper discussesthe likelihood of
futureBCT’s utilisation in ecolabelling programs.
Keywords Blockchain technology, Ecolabelling schemes, Ecolabels’ effectiveness
Paper type Viewpoint
Michaela A. Balzarova is
based at the University of
Canterbury, Christchurch,
New Zealand.
Received 18 August 2020
Revised 19 October 2020
Accepted 20 October 2020
Author would like to
acknowledge Dr Michael Braito
(BOKU University, Vienna) for
our stimulative discussions that
led to the completion of this
manuscript.
DOI 10.1108/CG-08-2020-0328 VOL. 21 NO. 1 2021, pp. 159-174, ©Emerald Publishing Limited, ISSN 1472-0701 jCORPORATE GOVERNANCE jPAGE 159
Introduction
Ecolabelling schemes (ecolabels) are voluntary management programmes that businesses
adopt to capture the increasing demand for products that minimise negative production
impacts on society and the environment (Chang et al., 2019;Delmas et al.,2013)andto
inform consumers of the green features products present via visible seals of approval
(Thøgersen et al., 2010). The promulgation of such labels has resulted in the
standardisation of principles for ecolabelling, defined by ISO 14020:2002. Consequently,
ISO classifies ecolabels via three categories. Type I as defined by ISO 14024 standards are
products that receive a seal of approval appearing on their labels, issued as a result of an
independent third-party audit. Type II encompasses self-declared claims such as short
statements, symbols or graphics that recognise an environmental aspect of a product,
component or packaging (ISO 14021). Such claims displayed on products are not
independently verified and are placedon by the manufacturer. As a result, most greenwash
occurs in this space, with labels providing empty and misleading statements such as “No
CFC”; “Allergy tested”; “Cruelty-Free”; “Eco safe” thereby lacking credibility and legitimacy.
Type III environmental declarations include life-cycle assessment as part of their
implementation (ISO 14025) and are perceived as the most rigorous. The fairtrade labelling
organisation (FLO) is one example of an effort to provide trustworthy assessments. Through
its third-party verification program, FLO certification promises “better prices, decent
working conditions and a fairer deal for farmers” and encourages consumers to “create
change through their everyday actions” [1]. Likewise, the Marine Stewardship Council
(MSC) provides certification allowing sustainable fisheries to claim they “contribute to the
health of the world’s oceans by recognising and rewarding sustainable fishing practices
and “influence the choices people make when buying seafood” [2]. Some standards
strategies are very specific about what is communicated to the consumer when they
consider a purchase. For example, Demeter provides a set of third-party certifiable bio-
dynamic standards that “not only exclude the use of synthetic fertilisers and chemical plant
protection agents in agricultural cropproduction or artificial additives during processing but
also requires specific measures to strengthen the life processes in soil and foodstuffs” [3].
However, despite worldwide recognition of the importance of such standards, uptake of
these falls short of universal implementation. The limited volume of organic food production
in New Zealand stands as an example of unsupportive public policies and in contrast to
Table 1 Overview of principle third-party veried ecolabelling schemes
Fairtrade Demeter Organic MSC FSC
Established 1989 1940 1967 1999 1994
Standard’s
focus
Farmers’ economic
empowerment
Closed nutrient
cycle, no
synthetic
chemicals
Closed nutrient cycle, no
synthetic chemicals with
varying requirements
according to country
Sustainable
fishing harvest
and operation
Environmentally appropriate,
socially beneficial and
economically viable
management of timbre
Ownership A non-governmental
organization (NGO)
Non-profit Varies, mainlynational Non-profit NGO
Price
premium
Fairtrade (FT) minimum
price þ
Fairtrade (FT) premium
price for improvement of
businesses and
communities
Possibility of
realized price
premium, not
fixed
Possibility of realized price
premium, not fixed
Possibility of
realized price
premium, not
fixed
Possibility of realized price
premium, not fixed
Traceability
in supply
chain
Mass balance allowing to
mix FT and non-FT
products
In full supply
chain
In full supply chain Chain of
custody
certification
DNA testing
Chain of custody
PAGE 160 jCORPORATE GOVERNANCE jVOL. 21 NO. 1 2021

To continue reading

Request your trial