Credibility and Transparency of Sustainability Labels: Exploring the linkages between Institutional Design and Regulatory Intermediation

As part of the European Green Deal, currently on hold, the European Commission aimed to regulate misleading environmental claims by ensuring consumers have reliable, comparable, and verifiable information to reduce greenwashing (ENV, 2023). A 2023 directive introduced a framework for substantiating voluntary environmental claims, particularly to address concerns about the credibility and transparency of sustainability labels. During preliminary research, stakeholder consultations were conducted, and several voluntary sustainability standard (VSS) bodies—mainly NGOs—sought formal recognition of their labels as ‘credible,’ citing two decades of work in establishing robust institutional designs. Much of this effort took place within the ISEAL Alliance, though some resulted from evolving regulatory intermediation in the farm and food sectors. However, VSS differ in their design, affecting their ability to ensure compliance and effectively transmit information to consumers (Nava & Tampe, 2023). Building on regulatory intermediation theory (Abbott et al., 2017), which positions VSS organizations as intermediaries between regulators and regulated entities, we examine different institutional designs to assess their role in sustainability governance. Using the four processes of credible assurance (Loconto, 2017; Bernard-Mongin et al., 2025), we compare 17 VSS used in France and analyze how their design affects label credibility and transparency. The most widely adopted standards facilitate implementation but pose credibility risks due to decoupling issues during attestation and determination phases. Additionally, the transmission mechanisms used by VSS have only recently gained attention in academic literature. Our study highlights that traceability innovations in popular VSS further impact consumer confidence. We conclude by emphasizing how a deeper understanding of VSS institutional design can enhance assessments of regulatory intermediation credibility in the field of sustainability.