Sector-Scale Proliferation of CSR Quality Label Programs via Mimicry: The Rotkäppchen Effect

Abstract

Proliferation of CSR quality certification programs can be analysed within theories of mimicry. Some firms use third-party quality certificates to signal their CSR practices to consumers accurately. These firms and consumers benefit from few, simple, recognized, reliable labels. Other firms use competing or own-brand labels to signal deceptively, gaining competitive advantage without compliance costs. Unreliable labels act as mimics to dupe consumers. If consumers cannot determine which labels are misleading, they ignore them all. Within ecological theories of mimicry, this is known as aggressive reverse Brouwerian automimicry. CSR-label research has a different naming tradition, and this sector-scale effect could be called a rotkäppchen effect, analogous to program-scale groucho and firm-scale goldilocks effects. It is testable by analysing mimicry mechanisms or predicted patterns.

1. Introduction

Research requires both theoretical and empirical components. This contribution is theoretical. Therefore, it follows the structure for a theoretical argument, not the structure for empirical analysis. It applies well-developed theory in one discipline, ecology, to an unanswered question in another field, corporate social responsibility, or CSR. This is a well-established approach. Economics, law, and psychology, for example, are used in many areas of applied research.

I propose a theoretical framework, based on existing models of ecological mimicry, to account for proliferation of third-party social-benefit CSR quality certificates [1] such as ecolabels [2,3]; and specifically, to explain published empirical observations that lax industry labels lure firms away from stricter NGO ecolabels [4,5]. Stringent and reliable certification programs convey information valued by consumers [6], especially for credence goods [7]. Such programs, however, can readily be copied by unreliable labels or certificates, and consumers cannot easily distinguish reliable from unreliable claims [8,9]. These circumstances can be analysed as mimicry.

Quality certification stakeholders operate at three scales: firm, program, and sector. At the scale of individual firms, enterprises can choose between: no label; an own-brand label; or various labels offered by government agencies, non-government organisations (NGO’s), industry associations, or commercial third-party certifiers. Their choices can change over time. They can join a multi-tier program and work up to higher tiers. Equally, however, they can sign up to a high-reputation program, advertise this extensively, and then swap to a less transparent own-brand label. In theory, own-brand labels could adopt more or less stringent criteria than third-party programs, but it is hard for consumers or NGOs to determine which is the case.

At program scale, commercial third-party quality certification schemes can persist only if they operate profitably. Their own immediate clients are firms, and to attract and retain them, they balance size and scope, criteria, tiers or levels, and audit procedures, against multi-component price structures. They also have to consider how their clients’ customers react. This includes market definition, geographical extent, and information sources and languages, as well as customer preferences and priorities. Some of these factors create pressures for programs to become more specialised and localized, while others create pressures for programs to become more generalised and globalised. In addition, some features of these programs attract fewer firms with high performance, whereas others attract more numerous firms with lower performance. These twin counter-pressures create a goldilocks effect, enabling programs to persist even with low take-up by firms [10,11].

At sector scale, different approaches have predominated in different industries, through historical strategic games between industry advocates and environment advocates respectively [12,13]. For example, own-brand health and fair-trade quality labels have become widespread in the retail food sector [14,15,16], whilst third-party ecocertificates have proliferated in forestry [5,17] and tourism [1,10,18,19,20,21,22], with more than 160 now operational [23,24]. Here, I consider this largest scale, the proliferation of programs across entire industry sectors [25,26,27,28,29].

Consumers benefit from universal, stringent, and reliable certification. If firms adopt third-party quality labels to provide information that consumers judge as reliable, that should create pressures for consolidation, growth, standardisation, transparency, and regulatory endorsement, since those factors enhance recognition and reputation [25]. These are pressures for accurate market signalling. If firms adopt such labels principally for public relations, however, that creates pressures for fragmentation, differentiation, obfuscation, and lobbying to prevent regulatory codification [10]. These are pressures for deceptive market signalling. I suggest that proliferation of third-party certification programs, especially in some industry sectors, can be analysed as a form of mimicry or isomorphism. That indicates that reliable and stringent third-party certificates are always likely to be undercut by lax and less reliable alternatives [4,5].

2. Existing Theoretical Frameworks: Signalling, Competition, and Credence

A number of existing theoretical frameworks in business and management provide relevant context. These include signalling, competition, copying or isomorphism, and credence. Signalling is the communication of information between stakeholders, either deliberately or inadvertently. Competition refers principally to attempts and strategies used by stakeholders with similar roles to gain advantages over their peers. Copying is a strategy used by one stakeholder to benefit from the features of another, typically a competitor. Where copying leads to similar business, management, policy, or organisational structures, this is known as isomorphism. Credence is the process by which one set of stakeholders relies on claims by another as part of a commercial transaction, but is unable to test them, and must take them on trust both during the transaction and subsequently.

Enterprises can signal to customers, employees, competitors, investors, and regulators [30,31,32,33,34]. Corporate social responsibility, CSR, is one widespread topic of signaling [8,35,36,37,38]. CSR signals are not always correlated with actual CSR performance or financial performance [36,39,40]. Psychological and neurological responses to CSR signals have also been examined [41,42] but only experimentally as yet. CSR signals have been found to influence the attitude and wellbeing of signal recipients more than their behaviour [18,43].

Ecolabels in the same sector, language, and geographical area, and addressing the same CSR topic, compete to be adopted, used and recognised. Both in theory and practice, lower-standard industry ecolabels can coexist in competition with higher-standard NGO ecolabels [4,5,44,45]. Competition between NGO labels drives standards up if the overall set of labels is fixed, but drives them down if new entries are possible [46]. Multiple labels can coexist under various competitive circumstances, including: consumer suspicions and uncertainties; bidirectional reputational spillovers between labels and firms; differences in reliability or in standards offered; and noise or imprecision in certification tests [26,27,44,47,48,49].

Few analyses have compared competing ecocertificate programs in practice [26]. One of the earliest comparisons [4] found that “green markets frequently have an environmentalist program competing with an industry one”. An analysis of Scandinavian salmon aquaculture [50] identified eight competing ecolabels, but combined criteria across programs, rather than comparing them. The most detailed analysis compared origins, scope, criteria, costs, and market penetration of the Marine Stewardship Council seafood ecocertificate against the competing Friends of the Sea certificate, and uncertified own-brand labels [51]. The focus was on stakeholder political manoeuvres, since the MSC ecolabel has attracted ongoing criticism [15,52]. An analysis of forestry ecocertification in central Africa found that a lax industry label lures firms away from a stricter NGO ecolabel [5].

Copying is a commonplace component of commerce, but it has been analysed principally for organizational structures, technologies, and goods, rather than CSR quality certification programs. Organisational isomorphism has a long history in many industry sectors [53,54], with coercive, mimetic, or normative drivers [55,56]. A recent example in tourism is the adoption of information technologies by hotels [22]. Imitation is also widespread at product scale [57,58]. Commodities, currencies, goods, services, brands, and product packaging and labelling can all be copied and counterfeited, and commonly are [59,60,61]. For credence goods, purchasers cannot judge quality directly and rely on quality certification [1].

Certification systems may be run by governments, non-government organisations, industry associations, or private corporations [1,62]. They are most preponderant in industries with high competition at retail level, such as tourism [19] and food and wine [14,15,16,35,63,64,65,66,67,68]. In the food sector, for example, key parameters include consumer-benefit considerations such as health, hygiene, and nutrition [69,70], and social-benefit issues such as fair trade and production conditions [71]. Quality labels trade in purchaser trust [25,26,72,73,74]. Unreliable labels create brand confusion [58,75,76] and label fatigue [77]. Quality certificates can be undermined via false information [78,79] and competing own-brand labels [71,80]. Similarity between quality signals, including labels, has been reported widely in the food industry [35,37,81].

None of these approaches have considered mimicry of more reliable quality certificates by less reliable quality certificates. None have considered large-scale proliferation, such as the more than 160 programs within the tourism sector. None have proposed a quantitative framework for consumer reactions to unreliable labels.

3. Proposed New Framework Based on Ecological Mimicry

Quantitative mimicry frameworks already exist in ecology. In the terminology of ecological mimicry, reliable certification programs are models. They signal their characteristics accurately. Unreliable programs are mimics. They signal deceptively. Consumers are dupes. They try to distinguish mimics from models, with incomplete success. Mimic labels are cheaper and easier for sellers to obtain, but misleading for consumers: “the proliferation of eco-labels … hamper[s] their efficiency in guiding consumers” [29]. Consumers duped by unreliable mimic certificates suffer a penalty: they pay extra for certified products [82] but benefits are non-existent or unverifiable.

Detailed mathematical constructions have been developed and tested for different types of ecological mimicry [83,84,85]. Reliable certification schemes, models, use similar labels to each other to boost recognition. In ecological terms, that is Müllerian mimicry [86,87]. Unreliable schemes, mimics, copy those labels to confuse consumers [88]. Reliable model and unreliable mimic certificates appear similar. This is Batesian mimicry. In detailed ecological terminology, unreliable quality certificates would be aggressive reverse Brouwerian automimics [86,87].

In a business context, the range of potential variables is smaller than that between different biological species. By analogy with the previously described groucho effect at firm scale [48], and goldilocks effect at program scale [11], this effect at sector scale (

Table 1. Effects at Firm, Program, and Sector Scales.

Scale	Term	Effect	Ref
Firm	Groucho	Firms with lowest CSR quality have strongest demand for CSR quality labels or certificates.	[48]
Program	Goldilocks	Certification programs continue to persist despite low take-up by individual firms.	[11]
Sector	Rotkäppchen	Programs proliferate despite consumer pressures for consolidation.	Here

) might be named as a rotkäppchen effect [89]. The term rotkäppchen derives from the original Germanic formulation of the world’s best-known mimic-based folk tale, which includes a benevolent model (the grandma), a dangerous mimic (the wolf), and a potential dupe at risk of penalty (the girl) [89]. Rotkäppchen effects can potentially apply for all forms of quality certification in all industry sectors.

Not all of the mathematical parameters used in ecological mimicry are relevant for rotkäppchen effects in CSR quality certification, but most major components are directly transferable. The expected proportions of models and mimics in a given population depends on: the ability of dupes to discriminate successfully between models and mimics; the rewards received for successful identification; and the penalties paid for misidentification, in either direction. Similarly, the expected resemblance between mimics and models depends on the costs and benefits to the mimics of successfully deceiving the dupes.

The rotkäppchen hypothesis for proliferation of CSR quality certification programs can be tested via two main approaches. The first is to test the internal mechanisms of mimicry. How well can consumers recognise different labels? How well can they tell whether labels signal CSR reliably? What gains or losses do they see themselves as experiencing, after purchasing and experiencing a certified product, if the label does or does not prove to be reliable? If international consumers trust or distrust programs in their own countries, do these perceptions carry over to those in other countries? Experimental tests, to elicit consumer reactions to competing real and fake labels are feasible in the field or online [9].

The second approach is to examine externally observable patterns. If we can classify quality certification programs as models or mimics, we can compare observed cf predicted frequencies. There are four potential criteria. First, transparency: are certification standards and processes transparent to consumers? Second, substance: are standards as stringent as international best practice? Third, audit: is the program subject to regular external audits, with penalties for failure? Fourth, external recognition: are certified products also recognized by other award or certification programs? These criteria may not always match declared goals of individual programs, but they can be converted to practical tests, as seen below.

The transparency test would require publicly accessible information, on: criteria applied by the certifying agency; processes for certification, audit and complaints; evidence that standards and processes are applied in practice; and lists of enterprises certified, under investigation, and decertified. The substance test would require that: each individual standard is testable and quantitative where possible; the overall set of standards is comprehensive and relevant; the standards are at least as stringent as all applicable legislation, especially where applicable legislation is weak; and standards match international best practice. The audit test would require that programs incorporate regular external third-party audits, including spot-checks, third-party processes for dispute resolution, complaints procedures, and publicly advertised decertification processes. The recognition test would examine whether certified enterprises are recognised externally for environmental performance, e.g., via awards. Reliable labels should satisfy these tests; unreliable mimics do not.

4. Practical Comparisons in the Food & Tourism Sectors

CSR quality labels have proved to be highly complex [1,11]. Their structures and effects differ depending on sector, national legislative and cultural frameworks, and the motivations of the many stakeholders involved. Retail-level end-user consumers are by no means the only stakeholders. There are also: wholesale firms that can profit differentially from differently-labelled products; industry associations that lobby for strategic advantages for their own sector; and government agencies and portfolios that may use CSR labels as criteria to provide or deny access to particular profit-making opportunities for individual firms [1,11].

In the food sector, for example, labelling cans of tuna as dolphin-friendly does not only influence supermarket customers, and competition between tuna fleets from different countries operating in different seas and using different net or line-based fishing techniques. It also affects what tuna brands are stocked by supermarkets. Same-sized cans need the same shelf space, so those with higher prices, mark-ups, and turnover are more profitable to stock. Similar considerations apply for the many different labels applied to eggs, such as cage, barn, free-range, organic, and various combinations. Supermarket eggs are a mass-produced commodity, and as soon as NGOs and governments define model standards for recognised terms, producers invent similar but non-legislated new mimic terms to confuse consumers without incurring any extra production costs. There are many additional examples that skirt the boundaries between confusing wording and prosecutable false advertising.

Tourism is another sector with numerous competing CSR label programs, in three categories: destinations, guides, and products or enterprises. There are rather few destination and guide programs. The Chinese standard for ecotourism destinations, and the Blue Flag program for water quality at swimming beaches, comply with most criteria for model programs. Similarly, field guide certification systems in southern Africa and Ecuador are tied into government permitting, and are well regarded by tourists and tour operators. The majority of tourism ecolabel programs aim to certify CSR performance of tourism products or enterprises. These have persisted and proliferated since they were catalogued two decades ago [23], though some have changed or disappeared. Few provide sufficient transparent and audited data to allow for reliable independent assessment.

There are more than 100 programs certifying CSR performance of tourism firms or products [23], but fewer than 20 that are at national scale, largest in their target market, still successfully operational, and focussed specifically on tourism; and that maintain official websites that are the principal repository of public information. These programs operate in: Austria, Australia, Botswana, China, Costa Rica, Europe, France, Germany, Italy, Scandinavia, Sweden, Thailand, UK, and internationally (

Table 2. National Programs Certifying CSR Performance by Tourism Firms.

Region	Website
Austria	umweltzeichen.at
Australia	ecotourism.org.au
Botswana	botswanatourism.co.bw
China	cnta.gov.cn (no longer available in English)
Costa Rica	turismo-sostenible.co.cr
Europe	travelife.eu
France	gites-de-france.com (formerly gites-panda)
Germany	viabono.de
Italy	legambienteturismo.it
Scandinavia	svanen.se (Nordic Swan)
Sweden	naturesbestsweden.com (formerly naturensbasta.se)
Thailand	greenleafthai.org (no longer available in English)
UK	green-tourism.co.uk
International	green-key.org

). Several others included in 2002 lists persisted for the decade 2002–2012, but not for the second decade 2013–2023.

None of these programs satisfies all of the subcriteria listed earlier. The criteria used here do not necessarily correspond to the declared goals of individual programs. For those programs which fail the first test of transparency, it is impossible to assess substance and reliability. Language translations introduce uncertainties for some. Information to test for independent evaluations differs between subsectors and geographic regions. Even allowing for these difficulties, less than 25% can be classified as high-standard models. This matches biological mimicry with poor discriminating ability and low penalty for misidentification [83,84,85,86]. That is, the limited available evidence supports the mimicry hypothesis.

5. Discussion

The conceptual argument advanced here is straightforward: quality-label programs, including ecocertification and other CSR labels, can and do mimic each other; and mimicry models developed in ecology can be applied to analyse relevant patterns, processes and parameters. Those models indicate that retail customers will always distrust third-party commercial label programs; and in practice, it appears that they do. What are the implications?

From a theoretical perspective, there is no all-encompassing framework for CSR quality labels [1], but there is a portfolio of models and arguments addressing different aspects. The groucho effect [48] shows how individual firms with low CSR quality and/or compliance, experience the strongest pressures to adopt CSR quality labels. Club theory [10] shows that ecolabel programs act like clubs, where the attributes of all members jointly affect perceptions of the club, which in turn affect perceptions of individual members. Game theory [12] shows that some types of CSR quality labels are aimed not at consumers, but at government agencies that issue permits to use public resources for profit. The goldilocks effect [11] argues that programs navigate between high quality but low take-up, and low quality but high take-up; and this explains why they can persist even with consistently low membership numbers.

The mimicry model proposed here, the rotkäppchen effect, explains how and why CSR labels routinely proliferate within sectors, so there are many competing labels, both third-party and own-brand, most of them intended to confuse consumers rather than inform them reliably. Some sectors now support more than 100 individual programs. Existing frameworks and empirical studies have considered interactions between small sets of competing programs [5], but none have accounted for large-scale proliferation. The mimicry model or rotkäppchen effect presented here, can do so. Existing mathematical formulations for ecological mimicry can yield experimentally testable numerical predictions for CSR certification, at a far finer level of detail than approaches based on market signaling, competition, or credence more broadly. From an analytical perspective, this is the principal advantage of a mimicry framework. If consumers cannot tell which certificates are reliable and which are not, and penalties for misidentification are low, then consumers will distrust all certificates equally.

Copying of brands and labels, including both consumer-benefit and social-benefit CSR labels, has been described previously in specific instances, but without adopting the general theoretical framework of mimicry. Mimicry is already studied extensively in other aspects of business marketing and copyright law [53,54,57,58,60,61,62]. Examples include the shapes, colours, images, fonts, and wording of product packages, and designs and patterns in fashion clothing. There has been less attention to social-benefit quality labels, but there are well-known examples in the food sector, e.g., organic, free-range, barn, or cage eggs, heart-healthy or low-fat meat, organic wines and fruit, and sustainably-caught fish and seafoods. There have been many controversies and lawsuits both over the business aspects of competition and copyright, and the regulatory aspect of compliance with standards.

From a practical perspective, the key finding from a mimicry framework is that continuing to improve programs that are already reliable, contributes little to overall industry improvement in CSR and environmental management, as long as those labels can be undercut by unreliable mimic programs. The more reliable model programs show what firms can achieve, but the less reliable mimic programs show how firms can avoid doing so, reaping all or most of the commercial benefits without the costs. Mimicry models indicate that this will continue to be the norm, not the exception. Consumer-level market mechanisms such as third-party quality certification can only improve CSR across an entire industry sector, if opportunities to establish mimic programs are foreclosed. Attempts to achieve this through commercial third-party accreditation of certification programs, suffer from the same gaming as the base-level programs [12]. Commercial third-party CSR quality certification will therefore only prove reliable at the scale of sectors or economies, if it has regulatory underpinnings.

That is the approach used for certification of professionals such as doctors, lawyers, engineers, or chartered accountants, where an industry body defines and tests the technical training needed to gain qualifications, and government regulation provides a differential market opportunity by restricting legal practice to qualified individuals. Similarly, for household chemicals such as pesticides and detergents, there are standards determined by regulation, and labels refer to compliance with those standards. For CSR quality labels, however, there are few such standards, and labels are devised solely by in-house or commercial third-party programs. As shown here, those options are always weak, because they can be undercut by mimics.

Mimicry seems to be less frequent where a single program was able to capture a market catchment, either national or international, from an early stage. CSR labeling in retail timber sales, for example, seems to be dominated by the international FSC label, operated by the Forest Stewardship Council. Similarly, the MSC label, operated by the Marine Stewardship Council, is widespread in retail fish sales. This does not necessarily indicate that those labels are accurate or effective [51,52], only that they have not been widely mimicked. In tourism, in contrast, national ecocertification programs run by tourism industry associations in a number of countries (Table 2) seem to be better known than the various international programs.

Tourism ecocertification first gained prominence about 25 years ago, and was promoted as a promising approach to overcome the UNWTO ban on process standards in international trade. Some of the early programs have disappeared, but many are still operational, despite: preferential adoption by low-CSR enterprises, the groucho effect; low take-up overall, the goldilocks effect; and low recognition and trust from tourists, via the rotkäppchen effect. It is not clear, however, that these programs have made any significant contribution to environmental management in the tourism sector. Indeed, at least some of the organisations concerned have endorsed private fixed-site tourism developments in public protected areas, with net negative effects on natural environment, social equity, and regional economies [90,91].

6. Conclusions

At the scale of individual firms, the groucho effect [48] shows that firms with lower actual CSR quality, experience higher economic incentives to acquire labels claiming high CSR quality. This creates a market for third-party labels offering lax criteria, weak audit and penalties, multiple tiers, and a non-compliance holiday period after sign-up [51]. At the scale of CSR quality label and certification programs, many programs remain operational, despite never achieving substantial take-up. This occurs through a goldilocks effect caused by two opposing pressures [10,11]. At the scale of industry sectors, the proliferation of programs can be analysed as a particular form of mimicry, the rotkäppchen effect. The argument applies to all forms of CSR quality labelling, across all industry sectors. Reported empirical patterns can thus be seen as one case of a general phenomenon, worthy of further analysis.

From a theoretical perspective, the rotkäppchen mimicry framework can now provide opportunities for a variety of tests, as outlined earlier. We can test: whether, and how well, consumers recognize individual labels; whether they believe that various labels signal CSR reliably; and what rewards or costs they see themselves as experiencing, after purchasing a CSR-labelled product or service, depending whether the label does or does not prove to be reliable in practice. We could also test how strongly consumer perceptions of CSR quality labels carry over from one label to another, the premise of the rotkäppchen effect; and whether this carryover differs between countries, brands, and CSR components. If we can successfully classify different CSR quality programs as either models or mimics using the tests outlined earlier, we can also compare the observed cf predicted frequencies of each, depending on recognition and reward parameters.

From a practical perspective, the rotkäppchen effect places a severe limit on the usefulness of third-party CSR quality labels, unless those labels are backed up by government legislation, as for most domestic environmental standards. Market-based measures alone will always be copied by weaker mimics. As soon as quality-label programs move from purely commercial third-party labels to government standards, however, then from an international trade standpoint they would be classed as “sanitary and phytosanitary standards”, which have their own complex trade rules.