Environmental rating ecolabels: How does product categorization affect product ratings and potential interpretation?

Environmental rating ecolabels (ERE) aim to present aggregated product environmental information to inform consumer choices. Performance ratings (e.g., A–E) are derived from life cycle assessment (LCA) results to enable comparison between products. The translation of LCA results to performance ratings requires definition of a common rating scale, either at a sector level or for subsets of products grouped by function (i.e., product categories). We investigate if and how assigning products to distinct categories influences final product ratings in ERE schemes. We consider if product categorization enables increased product differentiation and how the structure of categories affects the ratings awarded to products. Using a food sector case study, ratings were assigned to 2253 products based on aggregated environmental single scores derived from Agribalyse 3.1 and ratings obtained under three scenarios were compared: (1) no categorization—all products are placed on a single scale before rating; (2a) food group categorization—products are assigned to 11 food groups described in the Ciqual food composition database; and (2b) food subgroup categorization—products are assigned to 61 Ciqual food subgroups. We find that categorization has a significant influence on the final ratings, affecting at least 54% of products evaluated. Categorization restricts the range of products that can be compared but does not systematically improve differentiation within categories. For categorization to be used in ERE, categorization hierarchies need to be developed and harmonized at sector level reflecting consumer-relevant substitution options. This study demonstrates that categorization is a key methodological consideration for ERE scheme developers.