Only a third of consumers regularly consider sustainability in their purchasing decisions, according to a global study by Accenture and Havas Media RE:PURPOSE, which reveals the reasons for the disconnect between business and consumer expectations of sustainable products and services.
From Marketing to Mattering, based on a survey of 30,000 consumers in 20 countries, was commissioned in response and as a companion to the 2013 UN Global Compact-Accenture CEO Study on Sustainability, in which two-thirds of CEOs admitted that business is not doing enough to address sustainability challenges, similar to the 73 percent of consumers in the latest report that feel businesses are failing to take care of the planet and society.
The two studies reveal that, although CEOs see engagement with consumers as the single most important factor motivating them to accelerate progress on sustainability, they are often out of step with what motivates consumers to make responsible purchasing decisions: While 81 percent of CEOs believe that their company’s reputation for sustainability is important to consumers, the new research shows that less than a quarter (23 percent) of consumers report that they regularly seek information on the sustainability performance of the brands whose products they purchase. As result of this disconnect, only 32 percent of consumers say they ‘often’ or ‘always’ consider sustainability in their purchasing decisions.
However, as the name implies, the study reveals opportunities for companies to close this gap and engage customers by using sustainability to tangibly impact their quality of life.
The study suggests that, to engage more effectively with consumers, companies must:
- Promote a commitment to honesty and transparency throughout their organization’s operations in order to realize their full value. Trust is critical: Corruption is seen as the leading challenge for countries to address, ahead of job creation and economic growth, and a top-five challenge for businesses. Companies must be able to hold themselves accountable to consumers now armed with greater access to information that helps them expose disingenuous corporate behavior.
- Meet expectations for responsible business practices while delivering tangible improvements to consumers’ lives. This is particularly so in mature markets, where consumers increasingly consider corporate engagement in sustainability as a given.
- Shift their communication with consumers from a focus on their sustainable credentials and performance to a clearer demonstration of their purpose and relevance to society and the environment. This is especially relevant in emerging markets where companies are seen as playing a major role in improving health, education and other fundamental quality of life factors.
“CEOs told us in our previous research with the UN Global Compact that they struggle to identify the business value of sustainability even though they know that consumers are the most important determinant of their approach to sustainability,” said Peter Lacy, Accenture Sustainability Services, Asia Pacific. “It is clear that many companies, especially in mature economies … companies must offer improved consumer value propositions in which sustainability is inbuilt, not just a marketing tool.”
“Consumers clearly play a key role in helping to motivate corporate leaders to take action, strengthen the business case for corporate sustainability, and directly affect a company’s core business and related strategies,” said Georg Kell, executive director of UN Global Compact. “How companies design and develop products and services, and communicate this to consumers, however, will be critical factors on the journey toward driving sustainability based on universal principles into all market transactions.”
Interestingly, the survey also reveals a strong positive correlation between levels of optimism about the future, expectations that businesses should directly improve consumers’ lives, and expectations that they will improve the planet and society. Importantly, these factors also correlate to the likelihood that consumers will actively shop around for sustainable and responsibly produced products and services.
And, as always, the study reveals dramatic differences in sentiment and purchasing behavior between consumers in developing and developed markets:
- 85 percent of Indian respondents and 66 percent of Chinese believe their quality of life will improve in the next five years; 73 percent of Indians and 79 percent of Chinese say they actively buy responsible brands.
- By comparison, 37 percent of Western Europeans and 51 percent of Americans believe their lives will improve over the same period. And only 49 percent and 44 percent, respectively, say they actively buy responsible brands.
“Emerging market consumers see a direct link between the products they buy and the quality of their lives,” said Sharon Johnson, CEO Havas RE:PURPOSE. “They also suffer the negative consequences of irresponsible production and corruption more immediately. In mature economies, where these links are weaker, brands can no longer win consumers over by burnishing their sustainable credentials. People know more about products and companies than ever before. To be meaningful today, brands must create products and services that tangibly make a difference to people’s lives while fulfilling sustainable criteria. For all consumers, meaningfulness matters. Being a meaningful corporation or brand is not based on how you give money away anymore; it’s about how you do business.”
The report also highlights two global consumer segments in which sentiment differs. ‘Young optimists,’ ages 18 to 34, are the most engaged on sustainability: Two-thirds actively buy sustainable brands and say they recommend brands that behave responsibly (yet oddly, only a quarter of these say they always consider the social and environmental ethics of brands when making purchasing decisions). Similarly, 64 percent of mothers, who represented a quarter of the total sample, say they actively buy sustainable brands and recommend those that behave responsibly.
While Accenture and Havas only found one-third of respondents worldwide who value sustainability in general, when it comes to food here in the States, the number triples, according to recent research from Cone Communications’ 2014 Food Trend Tracker: Respondents said that although family satisfaction reigns supreme (97 percent), health and nutrition (93 percent) and sustainability (77 percent) are now also important factors when deciding which foods to buy. This also supports findings by a recent Harris poll, in which 63 percent of US grocery shoppers said they are more concerned with food waste than other issues such as air pollution (59 percent), water shortages (57 percent), climate change (53 percent) and genetically modified foods (52 percent).