Do consumers care about sustainability?
The short answer, yes. According to a joint study from McKinsey and NielsenIQ (2023) that examines sales growth for products that claim to be environmentally and socially responsible, consumers not only care about sustainability, they back it up with their wallets.Â
The study that analysed five years of US sales data, from 2017 to June 2022, concluded that “Products making ESG-related* claims averaged 28 percent cumulative growth over the past five-year period, versus 20 percent for products that made no such claims.”
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Over the last half-decade, global online searches for sustainable products have surged by 71%, as reported by The Economist Intelligence Unit. Consumers are now actively supporting sustainable businesses, a trend that isn’t exclusive of first-world countries. Even in developing and emerging markets, consumer satisfaction is increasingly linked to environmental concerns such as climate change. Many individuals expect businesses to prioritize nature conservation and the protection of natural ecosystems.
Influenced by younger generations, this change in consumer behaviour carries significant implications for companies striving to remain competitive and foster a more environmentally friendly, sustainable future. Several studies show an increase - around 70% - in online searches for sustainable goods and that at least half of the consumers are willing to pay more for sustainable products.
Here are some of the terms brands use when tapping into consumer sustainability trends: “plastic free”, “carbon zero”, “vegan”, “compostable”, “eco-friendly”, “sustainable packaging”, “organic”, “plant based” or “not tested in animals”.
What are the benefits of sustainability for brands?
“Sustainable businesses are future-fit. Companies that embrace sustainability are showing leadership in tackling climate change and getting ahead of the curve of carbon taxes. They are working to meet consumer demands, while boosting productivity and potentially cutting costs.”
According to this Unilever’s article published in September 2023, embracing sustainability can provide numerous advantages, namely:
👉Leading the charge: Smart companies are recognising the opportunities presented to early adopters of business sustainability;
👉Meeting consumer demand: Customers today expect transparency, responsibility and action from the brands and companies they buy from;
👉Creating operational efficiency: Becoming more sustainable usually demands that businesses significantly change their manufacturing processes, supply chains and other aspects of their business model. The actions undertaken, such as switching to cleaner and smarter energy, saving water and reducing journeys travelled, can also lead to greater efficiency;
👉Creating growth through purpose: There’s clear evidence to suggest that being purposeful can help companies attain growth, while also serving as a future-minded sustainable business strategy.
In short, products associated with environmental, social, and governance (ESG) factors experience accelerated growth, while companies can utilize sustainability initiatives to enhance customer loyalty. Ultimately, sustainability fosters enduring value for businesses, stakeholders, and the planet.
*Environmental, social and governance (ESG) is a framework used to assess an organization's business practices and performance on various sustainability and ethical issues.