Short answer – pretty important! Sustainability is no longer the buzzword it once was at the turn of the century – it’s now a ‘must-have’ instead of a ‘nice-to-have’ when it comes to consumer purchasing behaviors and if your company isn’t committed to reducing their environmental footprint, you might find yourself falling behind the competition.
Eighty percent of consumers in a 2020 survey by IBM indicated that sustainability was important to them and of those, 70% said they would pay a premium for products and services from companies that are environmentally responsible. Additionally, 57% of those surveyed indicated that they are willing to change their shopping habits to reduce environmental impact. (1) And with 1 in 3 consumers saying they have stopped purchasing a product or brand because of concerns about their sustainability or ethical practices, (2) you’d better believe that lacking in this area will affect the overall success of your business.
And the opportunity is there!
“76% of Americans would switch their preferred packaged goods brand if they were offsetting carbon emissions. 74% would switch gasoline brands in the same situation. 56% would use a credit card that was able to calculate and offset the environmental footprint of the products they purchase, even if it entailed extra fees.” (3)
The good news is that most corporate leaders understand that sustainability is important to their customers and to the future success of their businesses. Just have a scroll around most Fortune 500 company websites and you’re sure to find copy on eco-friendly practices and upcoming product innovations. But don’t get too excited - even though 78% of Americans said they would purchase products or services clearly labeled as eco-friendly, 53% said they “never” or only “sometimes” believe such environmental claims from brands and 45% say they look for a validating source (3).
So, the big question is - do your customers trust your brand’s sustainability efforts? If not, you could be risking customer churn and worse yet, losing customers to a competitor that has built more trust. Your company could be making great strides in establishing programs towards a cleaner planet, but if your customers don’t trust your efforts, you might not be communicating the right message or perhaps focusing on initiatives that are most meaningful to your customers.
Tailoring your sustainability brand messaging by segment will likely also be more impactful to your bottom line since there are demographic, generational, and geographical gaps in the importance of eco-friendly practices in purchase decisions and brand trust (see graphic). How important is sustainability to your customer segments when making the choice to buy?
Vennli can help you determine what resonates most with your consumers when it comes to sustainable practices and how you stack up against your competitors. By delivering actionable insights on which factors are truly important to your target audiences, you can improve messaging that builds trust, brand favorability and ultimately, purchase decisions – and on a larger scale, make strategic shifts in sustainability programs if you find your current efforts are falling behind the competition.
In conclusion, while there are many industries making positive strides to become more eco-friendly, there are some that have much more work to do - like the energy, transport, agriculture, fashion, and food retail industries, which have been ranked amongst the most polluting industries in 2021. (4) If your organization falls within these industries, you’re likely putting a larger focus on developing sustainable initiatives within the next few years. Before concentrating your efforts and a sizable budget on new programs, it would be wise to first check in with your customers to see which areas of environmental responsibility are most important to them and start there. That way you are makes in strides in the right direction for better planet while also increasing brand affinity and customer loyalty.
- “Meet the 2020 consumers driving change”, IBM June 2020
- “Shifting sands: Are consumers still embracing sustainability?” Deloitte, March 2021
- ” Business of Sustainability Index” GreenPrint, March 2021
- “The Most Polluting Industries in 2021” EcoJungle.net, March 2021