Evaluating the Efficacy of Information Campaigns and Ecolabels by Environmental Non-Governmental Organizations in Mitigating Environmentally Harmful Components

• Dr. Selina M. Rathwen

  Department of Environmental Policy, Wageningen University & Research, Wageningen, Netherlands

  Author

• Dr. Leoric D. Faelburn

  Centre for Environmental Policy, Imperial College London, United Kingdom

  Author

Environmental Non-Governmental Organizations (NGOs) are increasingly stepping up their game, using clever strategies like public awareness campaigns and eco-friendly labels to nudge both consumers and businesses toward a greener path. This deep dive explores just how effective these non-market approaches are in getting rid of harmful ingredients from our products and their supply chains. We'll blend insights from economic theories about information, market signals, and the quiet power of "private politics" to build a clear picture of how NGOs, as trusted third parties, can fix market glitches. They help spark demand for and supply of products that are better for our planet. While getting the word out can really open people's eyes and change what they buy, we also acknowledge that the sheer number of eco-labels out there can sometimes confuse folks. Beyond that, this article carefully looks at the intricate dance between NGO activism, how companies react, and the bigger picture of government regulations. It highlights the tricky bits, the surprising wins, and ultimately, the limits of relying mostly on non-government efforts to protect our environment. Our goal is to offer a clear understanding of when these NGO-led strategies truly make a difference and when they might hit a wall.

Bagwell, K. (2007). The economic analysis of advertising. In M. Armstrong & R. Porter (Eds.), Handbook of industrial organization (Vol. 3, pp. 1701–1844). North‐Holland.

Baron, D. (2009). A positive theory of moral management, social pressure, and corporate social performance. Journal of Economics & Management Strategy, 18, 7–43.

Baron, D. (2011). Credence attributes, voluntary organizations, and social pressure. Journal of Public Economics, 95, 1331–1338.

Baron, D. (2016). Self‐regulation and the market for activism. Journal of Economics & Management Strategy, 25, 584–607.

Baron, D., & Diermeier, D. (2007). Strategic activism and nonmarket strategy. Journal of Economics & Management Strategy, 16, 599–634.

Baron, D., Neale, M., & Rao, H. (2016). Extending nonmarket strategy: Political economy and the radical flank effect in private politics. Strategy Science, 1, 105–126.

Ben Elhadj, N., Gabszewicz, J., & Tarola, O. (2015). Social awareness and price competition. International Journal of Economic Theory, 11, 75–88.

Ben Elhadj, N., & Tarola, O. (2015). Relative quality‐related (dis) utility in a vertically differentiated oligopoly with an environmental externality. Environment and Development Economics, 20, 354–379.

Bom, S., Jorge, J., Ribeiro, H., & Marto, J. (2019). A step forward on sustainability in the cosmetics industry: A review. Journal of Cleaner Production, 225, 270–290.

Bonroy, O., & Constantatos, C. (2015). On the economics of labels: How their introduction affects the functioning of markets and the welfare of all participants. American Journal of Agricultural Economics, 97, 239–259.

Bottega, L., & De Freitas, J. (2009). Public, private and nonprofit regulation for environmental quality. Journal of Economics & Management Strategy, 18, 105–123.

Bottega, L., Delacote, P., & Ibanez, L. (2009). Labeling policies and market behavior: Quality standard and voluntary label adoption. Journal of Agricultural & Food Industrial Organization, 7, 1–15.

Brécard, D. (2023). How corporate‐NGO partnerships affect eco‐label adoption and diffusion. Environmental and Resource Economics, 86(1–2), 233–261.

Brécard, D. (2014). Consumer confusion over the profusion of eco‐labels: Lessons from a double differentiation model. Resource and Energy Economics, 37, 64–84.

Brécard, D. (2017). Consumer misperception of eco‐labels, green market structure and welfare. Journal of Regulatory Economics, 51, 340–364.

Buehler, B., & Schuett, F. (2014). Certification and minimum quality standards when some consumers are uninformed. European Economic Review, 70, 493–511.

Cabedo, J., Fuertes‐Fuertes, I., Maset‐Llaudes, A., & Tirado‐Beltrán, J. (2018). Improving and measuring transparency in NGOs: A disclosure index for activities and projects. Nonprofit Management and Leadership, 28, 329–348.

Conrad, K. (2005). Price competition and product differentiation when consumers care for the environment. Environmental and Resource Economics, 31, 1–19.

Delacote, P. (2009). On the sources of consumer boycotts ineffectiveness. The Journal of Environment & Development, 18, 306–322.

Eesley, C., & Lenox, M. (2006). Firm responses to secondary stakeholder action. Strategic Management Journal, 27, 765–781.

Egorov, G., & Harstad, B. (2017). Private politics and public regulation. The Review of Economic Studies, 84, 1652–1682.

Feddersen, T. J., & Gilligan, T. W. (2001). Saints and markets: Activists and the supply of credence goods. Journal of Economics & Management Strategy, 10(1), 149–171.

Fischer, C., & Lyon, T. (2014). Competing environmental labels. Journal of Economics & Management Strategy, 23, 692–716.

Garcia‐Gallego, A., & Georgantzis, N. (2009). Market effects of changes in consumers' social responsibility. Journal of Economics & Management Strategy, 18, 235–262.

Garcia‐Gallego, A., & Georgantzis, N. (2010). Good and bad increases in ecological awareness: Environmental differentiation revisited. Strategic Behavior and the Environment, 1, 71–88.

Garella, P., & Lambertini, L. (2014). Bidimensional vertical differentiation. International Journal of Industrial Organization, 32, 1–10.

Glaeser, E. L., & Ujhelyi, G. (2010). Regulating misinformation. Journal of Public Economics, 94(3–4), 247–257.

Gupta, S., & Innes, R. (2014). Private politics and environmental management. Journal of Environmental Economics and Management, 68, 319–339.

Hansmann, H. (1980). The role of nonprofit enterprise. The Yale Law Journal, 89, 835–901.

Heijnen, P., & Schoonbeek, L. (2008). Environmental groups in monopolistic markets. Environmental and Resource Economics, 39, 379–396.

Heijnen, P. (2013). Informative advertising by an environmental group. Journal of Economics, 108, 249–272.

Heyes, A., Kapur, S., Kennedy, P. W., Martin, S., & Maxwell, J. W. (2020). But what does it mean? Competition between products carrying alternative green labels when consumers are active acquirers of information. Journal of the Association of Environmental and Resource Economists, 7(2), 243–277.

Heyes, A., Lyon, T., & Martin, S. (2018). Salience games: Private politics when public attention is limited. Journal of Environmental Economics and Management, 88, 396–410.

Heyes, A., & Martin, S. (2015). NGO mission design. Journal of Economic Behavior & Organization, 119, 197–210.

Innes, R. (2006). A theory of consumer boycotts under symmetric information and imperfect competition. The Economic Journal, 116, 355–381.

Kraft, T., Zheng, Y., & Erhun, F. (2013). The NGO's dilemma: How to influence firms to replace a potentially hazardous substance. Manufacturing & Service Operations Management, 15, 649–669.

Lenox, M., & Eesley, C. (2009). Private environmental activism and the selection and response of firm targets. Journal of Economics & Management Strategy, 18, 45–73.

Liao, P. (2008). A note on market coverage in vertical differentiation models with fixed costs. Bulletin of Economic Research, 60, 27–44.

Lizzeri, A. (1999). Information revelation and certification intermediaries. The RAND Journal of Economics, 30(2), 214–231.

Mantovani, A., Tarola, O., & Vergari, C. (2016). Hedonic and environmental quality: A hybrid model of product differentiation. Resource and Energy Economics, 45, 99–123.

Marini, M., Tarola, O., & Thisse, J. (2020). Is environmentalism the right strategy to decarbonize the world? [FEEM Working Paper, 31.202].

Petrakis, E., Sartzetakis, E., & Xepapadeas, A. (2005). Environmental information provision as a public policy instrument. The B.E. Journal of Economic Analysis & Policy, 4, 1–33.

Poret, S. (2019). Label wars: Competition among NGOs as sustainability standard setters. Journal of Economic Behavior & Organization, 160, 1–18.

Rhodes, A., & Wilson, C. M. (2018). False advertising. The RAND Journal of Economics, 49(2), 348–369.

Sartzetakis, E. S., Xepapadeas, A., & Petrakis, E. (2012). The role of information provision as a policy instrument to supplement environmental taxes. Environmental and Resource Economics, 52, 347–368.

Stathopoulou, E., & Gautier, L. (2019). Green alliances and the role of taxation. Environmental and Resource Economics, 74, 1189–1206.

van der Made, A., & Schoonbeek, L. (2009). Entry facilitation by environmental groups. Environmental and Resource Economics, 43, 457–472.

van der Ven, H., Rothacker, C., & Cashore, B. (2018). Do eco‐labels prevent deforestation? Lessons from non‐state market driven governance in the soy, palm oil, and cocoa sectors. Global Environmental Change, 52, 141–151.

Van Gelder, J., (2004). Greasy palms: European buyers of Indonesian palm oil. Friends of the Earth London.

Wauthy, X. (1996). Quality choice in models of vertical differentiation. The Journal of Industrial Economics, 44(3), 345–353.

• pdf

All articles published by The Parthenon Frontiers and its associated journals are distributed under the terms of the Creative Commons Attribution (CC BY 4.0) International License unless otherwise stated. 

Authors retain full copyright of their published work. By submitting their manuscript, authors agree to grant The Parthenon Frontiers a non-exclusive license to publish, archive, and distribute the article worldwide. Authors are free to:

• Share their article on personal websites, institutional repositories, or social media platforms.

• Reuse their content in future works, presentations, or educational materials, provided proper citation of the original publication.