Labelling fashion markets

Abstract The present article discusses how an ethical and environmental labelling system can be implemented in fashion garment markets. Consumers act in markets that provide them with more information than their limited cognitive capacity allows them to handle. Ethical and environmental labelling in markets characterized by change, such as the fashion garment market, makes decision‐making even more complicated. The ethical and environmental labelling system proposed here is designed to alleviate firms' administrative burden and give consumers more choice. It proposes that information on ethical and environmentally friendly production should be combined to enable consumers to decide whether they want to contribute an extra sum for the item they purchase in the store, which would then be transferred to the workers or an environmental organization. The beneficiaries – garment workers in developing countries and environmental organizations – would decide what to do with the money. This is a simpler and more direct solution than those suggested by scholars and activists trying to solve the problems of ‘sweatshops’ and the environmental consequences of the production of fashion garments. It also reduces administration compared with existing systems. At the same time, it can be implemented alongside systems based on strict regulation of production.