Global policy and industry initiatives: a dive into sustainability labelling along the food supply chain

Food businesses worldwide are actively incorporating eco-friendly and sustainable practices across their supply chains, prioritising environmental sustainability from farm to fork. Their primary goal is to empower consumers to make informed and sustainable choices by raising awareness through sustainability labelling. However, the proliferation of unverified sustainability claims in the global market emphasises the need for both government and commercial intervention to establish accurate and validated labelling standards. This article provides insights into ongoing global initiatives aimed at developing regulations and legislation in this area. It emphasizes the importance for all stakeholders to monitor the evolving landscape to guide global market entry strategies, considering the benefits and challenges that harmonisation or lack thereof may bring.

The European Union (EU) has emerged as a leader in sustainability regulations with its 2019 Green Deal, aimed at achieving climate neutrality by 2050. Yet, discussions on the commercial implications of sustainability labelling as a high-value differentiator for food and beverage products are intensifying.

In parallel to government-level activities, food business leaders are increasingly under pressure to prove their sustainability commitments. However, they find it challenging to demonstrate their green credentials due to the absence of commonly-agreed practical tools supporting sustainability, such as green calculators. Whether it's responsible sourcing, waste reduction, or carbon footprint reduction, these labels serve as beacons of sustainability. However, unlike nutrition and health claims, where there is a robust body of evidence, the same cannot be said for sustainability labelling.

Presently, sustainability labelling primarily adheres to the principles of ‘truthful’ and ‘non-misleading’ representation. However, some government bodies around the world are going beyond these truthful principles to ensure greater transparency and accuracy in sustainability labelling. While commendable, this has led to a lack of harmonisation when transitioning from the national to regional level, and ultimately globally, resulting in trade barriers and confusion among consumers.

Consequently, there is a pressing need for global harmonisation in regulations supporting sustainability labelling, aligning with actions taken across supply chains. However, achieving this harmonisation, which could be referred to as the ‘holy grail’, presents significant challenges given the differing priorities and regulatory requirements/targets among countries.

A variety of sustainability labels are available in both the European and global markets. A recent mapping study revealed that nearly half of all new food product introductions include a sustainability claim, with approximately 20% incorporating sustainability details through logos⁽¹⁾. This trend is expected to continue as stakeholders increasingly recognise the value of sustainability labelling:

■ Food Business Operators (FBOs): view sustainability labelling as a competitive edge, differentiating their products in the marketplace.

■ Consumers: benefit from sustainability labelling to understand the environmental impacts of their purchases, enabling informed decision-making.

■ Regulatory authorities: play a pivotal role in guiding and accelerating progress towards environmental goals, responsible for establishing regulations that facilitate sustainability initiatives.

Sustainability labelling can be applied to the entire supply chain from farm to post-consumption waste, broadly categorised into five areas (see Figure 1). While activities like ‘carbon labelling’ and ‘eradicating greenwashing’ cover the entire supply chain, others such as ‘raw materials and agriculture’, ‘packaging’ and ‘food waste’ are specific to their respective segments.

Carbon labelling initiatives are gaining traction worldwide, although specific regulations are not yet widely implemented. Several countries are progressing towards either mandatory or voluntary ‘carbon labels’ and ‘environmental product declarations’ (EPDs). For instance, Brazil's PL 3701/2021 Bill, currently under discussion, aims to mandate the disclosure of CO₂ emissions throughout a product's lifecycle.

Recent trends highlight a consumer and regulatory backlash against greenwashing. Authorities are implementing various measures to address this issue, including:

1. Green labelling schemes: these are either mandatory or voluntary certification programmes that authenticate the environmental compliance of a product, process, or trader. For instance, France is currently finalising a voluntary environmental logo informing consumers about the environmental impact of food and beverage products. Although the logo remains unknown, it may replace the temporary Eco-Score pilot logo.

2. Green claims (also known as environmental claims): these are voluntary claims indicating that a product has a beneficial or neutral environmental impact. Such claims may encompass the overall environmental impact or specific aspects such as air, water, or soil quality.

Land and soil health, along with animal welfare, are key elements of sustainability labelling in agricultural practices. France has set the tone with its voluntary ‘Haute Valeur Environmentale (HEV)’ scheme, which encourages farmers to prioritise biodiversity conservation, minimise chemical inputs, and promote overall environmental sustainability. Meanwhile, Germany has implemented a mandatory labelling scheme that distinguishes between various animal housing conditions, including indoor, indoor with space, indoor with access to fresh air, outdoor runs/pastures and organic farming. In the US, the Environmental Protection Agency's (EPA) pesticide review interim decisions on neonicotinoid pesticides will be finalised in 2024 and will include measures to mitigate the environmental impacts of such use.

Packaging remains central to sustainability, with manufacturers holding various responsibilities that impact product labelling, including ensuring transparency and compliance with recycled content. This must be achieved alongside fulfilling other labelling obligations, such as providing guidance on recycling, reuse, or disposal of packaging, and complying with the requirements of deposit return schemes (DRS).

Recently, the EU has adopted new measures aimed at enhancing packaging sustainability and reducing packaging waste. Notably, these rules – which have been provisionally agreed by the European Council – include packaging reduction targets (5% by 2030, 10% by 2035 and 15% by 2040), along with requirements for EU Member States to reduce the amount of plastic packaging waste. Furthermore, specific 2030 reuse targets are anticipated for alcoholic and non-alcoholic beverage packaging (excluding items like milk, wine, aromatised wine, spirits), transportation and sales packaging, as well as grouped packaging.

Table 1 below outlines sustainability labelling regulations in various global markets, indicating those currently in place and those forthcoming.

Efforts to combat food waste have prompted labelling initiatives in certain markets, aiming to mitigate this sustainability issue. Household consumption notably contributes to food waste, prompting initiatives to engage consumers in waste reduction.

France has pioneered a food waste star system for retailers and intends to extend it to other stakeholders in the manufacturing sector. In the US, Congress is considering the Food Date Labelling Act of 2023, seeking to standardise and simplify product dating to reduce consumer confusion.

Meanwhile, in the EU efforts to regulate food waste are underway, with the revised Waste Framework Directive and a proposal for targeted revision of EU waste rules aimed at reducing food waste across the region by 2030.

The global food industry stands at a critical juncture, where sustainability labelling within the supply chain emerges as a pivotal factor for environmental well-being. The European Union (EU) and France have taken notable strides in this direction, establishing themselves as leaders. However, challenges persist, particularly in achieving global standardisation due to the lack of harmonisation in regulations supporting sustainability labelling.

While progress has been made in areas like carbon labelling, with Brazil mandating such measures, there remains significant work ahead. Efforts to combat greenwashing have set enforcement dates, yet further progress is needed to ensure transparency and accuracy in sustainability labelling.

Sustainability labelling for raw materials and agriculture development remains at the nascent stage, requiring substantial attention and investment. However, addressing the complexities of packaging logo standardization and enhancing consumer understanding remains a considerable challenge.

Furthermore, while efforts to mitigate food waste have been made evident by initiatives in France, the US, and the EU, ongoing collaboration and efforts are essential for achieving meaningful reductions in food waste and promoting sustainability across markets.

It is crucial for food industry stakeholders to remain vigilant in monitoring evolving landscapes to guide their global market entry strategies. This helps ensure compliance with current regulations, as well as readiness for future requirements. Moreover, using sustainable labels on products not only demonstrates a commitment to environmental sustainability to governments and consumers but also empowers consumers to protect our vulnerable planet.

¹For the purpose of this article, the definition of ‘labelling’ is derived from the Regulation (EU) No 1169/2011 of the European Parliament and of the Council of 25 October 2011, as amended. The regulation defines labelling as

‘Any words, particulars, trademarks, brand name, pictorial matter or symbol relating to a food and placed on any packaging, document, notice, label, ring or collar accompanying or referring to such food’.