Consumers globally are willing to pay more for products with a lower environmental impact, as they express increasing concern over climate change and environmental sustainability, yet many still find sustainable consumption too expensive, and focus on different aspects of product sustainability than the companies producing the products, according to a new study released by global management consultancy Bain & Company.
For the study, Bain surveyed more than 23,000 consumers globally about a broad set of sustainability issues, including their concerns and buying behaviors, and also conducted conjoint analysis and ethnographic research, speaking directly to hundreds of consumers.
The survey revealed a broad and growing interest among consumers on sustainability issues, with nearly two-thirds (64%) of respondents reporting being “very or extremely” concerned about environmental sustainability, and 60% saying that their climate change concerns have intensified over the past two years.
While the majority of consumers in almost every market expressed concerns about environmental sustainability, those in fast growing markets appeared to have higher concern levels than those in developed countries, with 85% in India, 81% in Brazil and 73% in China, for example, reporting being very or extremely concerned, compared with 53% in the U.S., 54% in Germany and 56% in the UK.
The report appeared to dispel prevalent perceptions of differing levels of sustainability perceptions across demographic groups, finding, for example, that concerns about climate change did not vary significantly by age, with 68% of Boomers and 69% of Gen X respondents reporting being very or extremely concerned about the environment, compared with 74% of Millennials and 72% of Gen Z. Additionally, while 85% of self-described U.S. Liberals reported high climate change concerns, compared to only 39% of Conservatives, the latter group reported relatively higher levels of concern than their Liberal counterparts on environmental issues such as water, biodiversity loss and air pollution.
As environmental concerns grow, the report found significant interest among consumers to purchase sustainable products, with 50% reporting that sustainability was one of their top 4 purchase criteria, and respondents globally reporting that they would pay a 12% premium on average for minimized environmental impact. The report indicated that this willingness broadly mirrored concern levels, with consumers in faster growing markets accepting larger premiums, such as 20% in India, 16% in Brazil and 15% in China, compared with 11% in the U.S., 9% in Germany, and 8% in the UK.
Despite the willingness to pay more for sustainable products, however, the report found a significant gap in the abilities of consumers to do so, with companies on average charging 28% premiums for more sustainable products, well above the level consumers were willing to pay, leading almost half of developed market consumers and over a third of those in fast-growing markets to report that living sustainability is too expensive.
An additional factor impacting consumers’ ability to purchase more sustainable products revealed by the report was an inability to discern which products are more sustainable, despite relying on labels and certifications. When asked to determine which of two products generated higher carbon emissions, for example, the survey found, that the consumers could not make the correct choice approximately 75% of the time.
The study also indicated a disconnect between definitions and criteria for sustainability between consumers and businesses, finding that while most companies focus on how products are made, such as the sustainability of ingredients and production methods, around half of consumers focus instead how the products are used in their sustainability considerations, looking at aspects such as product reusability, durability, and waste minimization.
Click here to access the study.