A sustainable consumption index/label to reduce information asymmetry among consumers and producers

The interest of various stakeholders in environmental issues forces firms, especially those operating in environmentally risky sectors, to undertake certain environmental practices to build an environmentally friendly profile either at their operational or production level. An interesting and extensive debate has been made by many scholars to identify ways to reduce asymmetric information between corporate sustainability efforts and consumers by developing different types of eco-labels. Despite the positive effects of current eco-labels to eradicate asymmetric information, there remains the question of how to do this well when a firm has more than one eco-label, different focus (on operation or on production), single- or multiple-environmental issues, local or global certification system, environmental or sustainability orientation. This paper aims to provide a consumption sustainability index to simplify current eco-labels and transform them under the triple-bottom line approach into a triple-rating-label to demonstrate low, medium or high corporate and product sustainability contribution. It contributes to current literature through the complexity and variety reduction of corporate multi-certifications with different economic, environmental and social labels. Additionally, it focuses on the utilization and transfer of information from other sources of firms (e.g. annual reports, sustainability reports) to a new label. The proposed sustainability evaluation framework was assessed on a sample of firms operating in the coating industry.