Products participating in carbon neutral labelling schemes have shown an enormous customer response. For example, the Sanctuary Winery in New Zealand is understood to have had a ten to fifteen-fold increase in overseas sales demand in the year following it’s becoming Carbon Neutral.

This has lead commentators to ask why these forms of labelling are so powerful, and one answer may be found by looking at consumers’ decision making process.

Consumer Goods

Many of the criteria that are used to make consumer choices are scalar rather than absolute i.e. factors such as price, quality, size or performance.

Where one product may be a little cheaper or a little bigger than another consumers must make a decision about whether that increases it’s value relative to it’s price and other qualities.

With ethical labelling the decision is much more simple – a product either is (say) Carbon Neutral, or it isn’t.  As such eco-labelled products are quickly differentiable by potential customers (despite the often relatively low cost implications of becoming carbon neutral). For this reason, early adopters of such standards can achieve a particularly disproportionate response by consumers as often there is a long period where they are the only product in their market space that can make these claims.

Services

For service providers consumer choice is often based around potential clients’ overall perception of a company. There have been several cases of ‘company labelling’ initiatives intended to help build a positive perception of the firm ‘at a glance’.  These include claims of providing ‘work-life balance’ or ‘ethical procurement’ or ‘equal opportunity’ but in many cases these are either irrelevant or esoteric to most consumers.

Again, in these instances Carbon Neutral status represents a clear, quantifiable, unambiguous claim that prospective clients understand and respond to.

(This section is excerpted from “Green Business: How to use Carbon Neutral Status to Increase Market Share, Add Value to Products or Services (and Win More Government Tenders)” ).