As sustainability professionals, we’ve been talking for years about how consumers are increasingly influenced by values and sustainability. We search the data for proof points that people would prefer to buy from a more sustainable company. Indeed, even when we find the proof points, we also find a large action gap between what people say and what they do.
We think the action gap is about to get smaller, due to a set of trends and the context of the pandemic.
The pandemic has shaken the mental health and emotional well-being of people everywhere. It also has caused many people to consider more carefully what they value most: family; friends; health — and savings, if possible. As a result, consumers are paying increased attention to companies that treated their customers and employees well during the pandemic.
Against the backdrop of the pandemic, we see important trends.
Values matter, even now
The importance people place on values in purchasing has increased. Even a global pandemic and economic trouble couldn’t push values out of people’s minds. As the pandemic surged around the world, stock-art giant Getty Images wanted to know whether it rendered everything else irrelevant. It combed its own vast customer database of more than a billion image searches, then commissioned a third-party survey of more than 10,000 people across 25 countries, conducted in more than a dozen languages.
If sustainability’s importance to consumers and purchasers didn’t go away in the midst of a global pandemic, will it ever?
Getty found that months into the pandemic, consumers still had attention for other issues, represented by four basic categories: sustainability; wellness; “realness” (authenticity); and technology.
Sustainability was, they learned, trending upwards “quite against expectation.” And for those respondents who are passionate about sustainability, they said they were willing to pay 10 to 15 percent more for products or services from companies that:
- use sustainable practices;
- are aligned with their values;
- have transparent business practices; and
- care about the well-being, safety and security of customers.
In other words, even in times of enormous upheaval, people still have, and act on, personal values.
Shoppers’ behaviors continue to change
What’s more, it’s not all just happy talk. We have seen this in shoppers’ actual purchasing behavior during the pandemic. Evidence? NYU Stern Business School’s 2020 Sustainable Share Market Index shows shares of sustainability-marketed products grew significantly during the week of March 15, and continued to maintain that increased share through mid-June.
We have to wait until the researchers release the data analysis for the second half of 2020 to see if the trend held. However, the period of March to June clearly indicates consumers were more frequently putting their money where their mouth is on sustainability. The same study found that sustainability-marketed products are responsible for more than half of the growth in consumer-packaged goods from 2015 to 2019.
Businesses are changing, too
What’s changed is not just consumers but also business purchasing. We see evidence of business-to-business purchasing teams applying sustainability criteria to supplier expectations.
The biggest driver seems to be net-zero ambitions. Any company that has taken on net-zero commitments will be looking at its supply-chain partners to reduce its carbon emissions and switch to renewables in the next few years.
Indeed, Apple already has set the bar for its major suppliers such as Foxconn. Foxconn committed to supply Apple’s iPhones from factories run on 100 percent renewable energy. Other companies, such as IKEA, BT, Unilever, Ericsson and Telia, have launched a new net-zero initiative aimed at reducing greenhouse gas emissions across their supply chains.
The trend in B2B spending strikes us as an important lever to accelerate even more sustainable production. New cross-sector efforts to address corporate supply chains and purchasing will further expedite effective approaches.
If sustainability’s importance to consumers and purchasers didn’t go away in the midst of a global pandemic, will it ever?
Remember when U.S. automakers thought customers weren’t that concerned about quality because they bought largely based on style? One day, we’ll look back at the belief that sustainability doesn’t matter to customers, shaking our heads the same way.
