As the realities of climate change become more and more apparent, a commitment to sustainability is no longer a nice-to-have for the companies of the world — it’s a business imperative, especially in the eyes of consumers.
Consumer behavior and expectations are changing rapidly, with consumers demanding that businesses large and small commit to more sustainable business practices. The good news? Companies that meet those demands will almost certainly be rewarded. In fact, Nielsen’s most recent Global Sustainability Report revealed that 66% of consumers said they were willing to pay more for sustainable brands, which was up from 55% in 2014 and 50% in 2013.
Of course, many organizations are actively engaging in corporate sustainability initiatives — from making marked reductions in energy use and waste to growing sustainability across their supply chains. After all, not only is it the right thing to do, but there’s a measureable business value, too. But in order to meet consumer expectations and compete in an evolving marketplace, businesses need to keep pace with changing trends and use them to proactively adapt their short- and long-term sustainability strategies.
To get the wheels turning, below we share three important sustainability trends related to consumers, as well as key takeaways, that every company needs to pay attention to.
Trend 1: Consumers are using their wallets as their words
Building off the aforementioned Nielsen research, according to Yale Program on Climate Change Communication, 31% of American consumers say they have rewarded companies that are taking steps to reduce global warming by purchasing their products in the last year. In addition, 21% of American consumers say they have punished companies for opposing climate action by avoiding their products. However, fewer than one in 10 had gone so far as to contact a government official to urge them to act on reforms.
Image Credit: Yale Program on Climate Change Communication
The takeaway: While most people aren’t taking to the streets and calling their representatives demanding change, many are paying attention and rewarding a company’s environmental efforts by giving them their business.
Trend 2: Sustainability is a global consumer concern
According to a study by Unilever, a global consumer brand company, 21% of people surveyed across five countries said they would actively choose brands if they made their sustainability credentials clearer on their packaging and in their marketing. Furthermore, while 53% of shoppers in the United Kingdom and 78% in the United States say they feel better when they buy products that are sustainably produced, that number rises to 88% in India and 85% in both Brazil and Turkey.
The takeaway: Sustainability knows no borders. As more companies look for opportunities to expand their global footprint and enter new markets, their commitment to sustainable business practices will likely be a competitive differentiator.
Trend 3: Age matters, but it’s not everything
It’s been said that climate change and its associated sustainability challenges are a defining issue of the Millennial generation — and research shows they’re willing to speak with their wallets the loudest.
“Despite the fact that Millennials are coming of age in one of the most difficult economic climates in the past 100 years, they continue to be most willing to pay extra for sustainable offerings — almost three-out-of-four respondents in the latest findings,” the previously mentioned Nielsen report states.
However, Nielsen went on to say that companies shouldn’t abandon Baby Boomers in their quest to appease and appeal to Millennials.
“Fifty-one percent of Boomers are willing to pay extra, an increase of 7% since last year,” Nielsen said. “This segment remains a substantial and viable market in the coming decade for select products and services from sustainable brands.”
The takeaway: The buying preferences of Millennials absolutely need your attention. After all, millennial spending will grow to an estimated $1.4 billion and represent 30% of total retail sales by 2020. But consumers of all ages are becoming more environmentally conscious, signaling that sustainability should no longer be seen as a generation-specific value, but rather a growing societal value.
Is Your Company Ready to Take the Sustainability Lead?
In the United States, the political waters are growing increasingly murky when it comes to addressing the sustainability challenges we face in the wake of climate change. But as a sustainability and climate change consulting firm working in this age of uncertainty, we know climate action is far from over.
“Companies need to answer to their consumers and shareholders, not only politicians,” Michael Liang, Director of ESD China in Guangzhou, told us recently. “We all share the same planet and all have a responsibility to protect it. Regulatory compliance is important, but in many cases, a bare minimum. Business leaders should be taking longer views on sustainability.”
And as it turns out, the majority of Americans want companies to step up to the plate in this regard. According to the 2017 Cone Communications CSR Study, 63% of Americans are hopeful businesses will take the lead to drive social and environmental change moving forward, in the absence of government regulation.
The bottom line? The majority of consumers want more sustainability action and they’re looking to businesses to take that action.
Learn how your company can level up your corporate sustainability programs in light of increased consumer engagement around sustainability and climate change.
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