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In today’s world, environmental sustainability has become a buzzword, and for a good reason. With climate change, pollution, and other environmental issues looming over us, it is becoming increasingly important to adopt eco-friendly practices in every aspect of our lives. This is not only true for individuals, but also for businesses. Consumers are becoming more aware of their impact on the environment and are demanding sustainable products and services. This shift towards environmental sustainability is not just a moral obligation but also a business imperative.
Environmental sustainability has become a crucial factor in determining the success of businesses. Consumers are increasingly making purchasing decisions based on a company’s environmental policies and practices. According to a survey conducted by Nielsen, over 81% of consumers worldwide feel strongly that companies should help improve the environment. This sentiment is reflected in their purchasing behavior, with 73% of global consumers indicating that they would change their consumption habits to reduce their environmental impact.
Environmental sustainability has become a significant basis for consumers’ decisions.
Globally, sustainability is rated as an important purchase criterion for 60 percent of consumers, and 85 percent of people globally indicate that they have shifted their purchase behavior towards being more sustainable in the past five years. The rise of environmental sustainability as a concept for consumer purchasing behavior is one that has sharply risen as more and more people come to terms with the reality of climate change. Environmental sustainability, despite being a topic of discussion for decades, has only recently gained widespread attention. This is due in part to the increased frequency of extreme weather events, such as hurricanes, floods, and wildfires, that have been linked to climate change.
Consumers are becoming more aware of the impact their actions have on the environment and are seeking out products and services that are environmentally friendly and, in fact, contribute positively to the environment. We are fast moving from just sustainability to regenerative sustainability. This realization of how consumer choices affect the planet has led to a trend that is particularly prevalent among younger consumers, who are more likely to prioritize sustainability when making purchasing decisions.
Why is it vital that businesses take a more front-footed approach to sustainability?
Millennials and Gen Z are becoming a force to be reckoned with as they continue to represent a larger share of the consumer demographic. Companies that don’t have sustainability as part of their core value proposition need to act now to protect against future reputational impacts and loss of market share,” said Shikha Jain, author of the study and Partner at Simon-Kucher & Partners. “We’ve been on this journey for a while, but the clock is ticking, and failure to think through the implications could have long-term consequences for traditional firms.”
The reality is that companies that ignore the trend toward environmental sustainability do so at their own peril. Not only are they at risk of losing customers to competitors who offer sustainable products, but they also risk damaging their brand reputation. Consumers are increasingly holding companies accountable for their environmental impact, especially through the use of social media in this day and age where the digital perception of a brand or business plays a vital role in patronage and subsequent success.
Conversely, it goes without saying that companies that embrace sustainability can benefit in a number of ways. For one, they can attract customers who are willing to pay more for sustainable products. An international study of 20,000 customers by grocery brand giant Unilever identified that one in three (33%) people were choosing to buy from brands they believe are doing environmental good (regenerative sustainability!). Beyond the fact that sustainable businesses will most likely attract a lion’s share of consumers in global markets, they are also rightly positioned for the growth of ESG-focused investments that are projected to soar by 84% to the tune of $33 trillion by 2026, according to PWC.
In addition, companies that prioritize sustainability are more likely to attract and retain employees who are committed to environmental stewardship. This can lead to higher job satisfaction and lower turnover rates.
How can brands and businesses respond better to the demand for environmental sustainability from consumers?
In response to the growing demand for environmental sustainability, brands and businesses must take concrete steps to reduce their environmental impact. One of the first steps they can take is to conduct a thorough sustainability assessment of all products, services, and operations. This assessment can help identify areas where improvements can be made and set specific and measurable sustainability goals to work towards.
In addition to setting goals, companies should look to increase transparency by disclosing sustainability-related information such as carbon footprint, supply chain management, and environmental impact. This transparency will enable consumers to make informed choices and hold companies accountable for their sustainability practices. Investing in sustainable and eco-friendly materials, packaging, and production processes is also essential. Eco-design practices can be implemented to reduce waste and increase the lifespan of products. To truly create a sustainable culture, companies must integrate sustainability into their values, by sponsoring or collaborating with environmental impact-focused companies with transparent values and standards. Investing in regenerative sustainability projects that generate quantifiable positive impacts on the environment.
Greenwashing has been a huge challenge for consumer perceptions of sustainability from brands and businesses in recent times. According to a 2021 survey of 395,000 consumers around the world, brand cynicism is at an all-time high. 71% of the respondents had little faith that the brand would deliver on its sustainability promises. Despite this cynicism, consumers are desperately seeking brands that will make a meaningful difference, with 73% saying brands must act now for the good of society and the planet.
Bottom line
Environmental sustainability is no longer just a buzzword; it has become a business imperative for companies that want to remain competitive in the marketplace. Consumers, particularly younger consumers, are becoming increasingly aware of their impact on the environment and are demanding sustainable products and services. Companies that ignore this trend risk losing customers to competitors who offer sustainable products, damaging their brand reputation, and facing long-term consequences.
Companies that prioritize sustainability can attract customers who are willing to pay more for sustainable products and benefit from the growth of ESG-focused investments. They are also more likely to attract and retain employees who are committed to environmental stewardship, leading to higher job satisfaction and lower turnover rates. Overall, sustainability is becoming a significant basis for consumers’ decisions, with 85% of people globally indicating they have shifted their purchase behavior towards being more sustainable. As such, it is crucial for businesses to embrace transparent sustainability as a core value proposition and take the necessary steps to meet the demand for environmentally friendly products and services.
