Customers care about sustainability – and they’re proving it with their wallets.
Many companies have increased the time, effort, and resources they put into ESG and other sustainability practices. More and more companies claim to support environmental and social issues in a variety of ways. That’s good because, in a 2020 McKinsey study, more than 60% of respondents said they’d pay more for a product with sustainable packaging. Why do customers feel so strongly about this topic? As a customer, why is it important to support sustainable businesses?
What is Sustainability?
According to UCLA, sustainability is “the balance between the environment, equity, and economy.”
The most often quoted definition comes from the UN World Commission on Environment and Development: “Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”
Why Does Sustainability Matter?
Sustainable practices support ecological, human, and economic health and vitality. The principle assumes that resources are finite, and should be used conservatively and wisely. It’s important for everyone to consider long-term priorities and the consequences of the ways in which all of our current resources are used. To put it simply: sustainability is about our children and their children, and the world we hope to leave them.
If you are part of this world (hint: you are), then you need to care about sustainability. Since, as mentioned, all resources are finite, it’s up to each of us to be particular about how we consume products and how we rely on the various resources available. If you are a person who wants to leave the world a better place, then you need to be serious about sustainability. You’ve probably heard the phrase “put your money where your mouth is” – and many consumers are doing just that.
Throughout the world, consumers are taking more notice of sustainability, and companies are paying attention. They are changing their practices to better meet the needs of people who are passionate about the Earth and its future. For example:
- 67% of our shoppers said they’re aware of environmental responsibility, while 19% are extremely committed to the practice. (Hive Brands)
- 93% of the world’s 250 largest companies report on sustainability. (UN Sustainable Development Goals Report)
- 100+ countries have policies on sustainable consumption and production. (UN Sustainable Development Goals Report)
- Consumers believe the five most important sustainable practices are waste reduction, reducing carbon footprint, sustainable packaging, ethical working conditions, and respect for human rights. (Deloitte)
Both from a public policy and private business perspective, sustainability is having a moment – and it’s driven by consumers and what they want.
Tracking Dollars Instead of Sentiment
It’s easy to feel like sustainability is a trend. Walk down any aisle of your local store and you will probably see labels like “eco-friendly”, or “fair trade”. Some consumers might believe that companies are simply making a cash grab and there isn’t actually much demand. However, those people would be wrong.
To understand the real demand for products made with eco-friendliness and sustainability in mind, McKinsey and NielsenIQ undertook an extensive study. The study resulted in some key findings that confirmed some commonly held perceptions.
The study wanted to look beyond the self-reported intentions of consumers and view the ways they actually spent their money. The study determined that there is a fact-based case for bringing environmentally and socially responsible products to market as part of overall ESG strategies and commitments. The data showed that products making ESG-related claims averaged 28% cumulative growth over the past five-year period, versus 20% for products that made no such claims. The study was quite extensive and looked at other factors as well, and you can view the details here.
The bottom line – for producers and consumers – is that sustainability is here to stay. The more that we can all support companies who focus on eco-friendliness and sustainable practices, the more scalable these practices will become – which keeps costs down for everyone. Sustainability is not just a trend, it’s an important principle for consumers who are paying attention. Today’s organizations must make sure they are on board in order to meet modern demands. For more information on Sunham and sustainability, check out this article.
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