2021 so far has seen a string of green promises.
President Joe Biden has suspended leases for fossil fuel development on federal lands.
Meanwhile, BlackRock, the world’s largest asset manager, will push companies to commit to achieving net zero emissions by 2050, and even hinted at dropping companies who fail to do so.
What was once seen as a “nice-to-have” is now a necessity for both businesses and governments. It literally pays to be more sustainable.
Consumers want to play their part too, but it’s not without challenges.
Following on from last week’s theme of corporate governance and investing, we focus on the barriers to behaving more sustainably and the role businesses – particularly CPG and retail brands – play in making environmental ambitions a reality.
Where there’s a will, there’s not always a way.
Before COVID-19 even entered our vocabulary, the climate crisis was a burning problem.
Fast forward to today, and the situation is even more dire. In our Connecting the dots annual trends report, we explored the real impact of COVID-19 on the environment, and the actions needed to reset how we operate on an individual, corporate, and governmental level.
Climate change, pollution, and the plastics crisis are the leading environmental worries for consumers in the U.S. and UK.
Over the past year, consumers said they’ve made an effort to recycle more, use less energy, and reduce food waste; all very practical, more easily implemented steps.
These actions came ahead of using fewer single-use plastics – likely due to hygiene and health reasons during the pandemic.
What’s left is a mountain of new waste. Face masks littering the streets are a common sight; and the disposal of millions of extra vaccination syringes only adds to the issue.
Actions like buying more products with recyclable packaging or buying more organic food fall down the list of priorities for most consumers. But when it comes to organic food, Gen Z appear to be the exception – 27% say they’ve bought more organic food over the past year compared to 16% of boomers.
This could be because of the associated health benefits of eating organically, making them a more attractive market for organic food brands in particular.
These environmental actions don’t top the list because they’re less attainable. It’s crystal clear why when we look at the barriers to purchasing eco-friendly products. Yep, you guessed it: price.
60% of consumers in the U.S. and UK say the high cost of eco-friendly products is a barrier to purchasing them.
Cost is the biggest barrier by quite some distance, and remains the same across high and low-income groups.
From our GWI Core research, we know the majority of consumers would rather pay more for an eco-friendly product, which really highlights the massive gap between intent versus action.
The cost barrier is a theme that’s come up before in our research, and the fact consumer sentiment hasn’t changed in a couple of years says a lot. Consumers could have the best intentions in the world, but unless eco-friendly products become more affordable, we all face a losing uphill battle.
While cost is the biggest hurdle, it’s certainly not the only one.
Many consumers say they also have difficulty finding eco-friendly products or don’t have enough information about what eco-friendly really means.
This comes down to messaging and communications, and it’s something for sustainable brands to bear in mind. If consumers don’t understand the benefits, or believe in the mission, it’ll be a tricky feat to engage them in the first place.
More action is needed if we want to bridge the recycling gap.
We don’t see the same barriers when it comes to recycling or using reusable packaging, but there’s still noticeable hurdles to overcome.
Around 25% of consumers say they’re not sure which products are recyclable or not, and 15% say they’re not sure how to correctly sort through materials.
This signals a public education issue around recycling, and the need for more information – especially for young people, as our research shows.
Boomers are far more likely to cite no barriers to recycling, which isn’t surprising given this group is the most likely to say they always try to recycle compared to Gen Z and millennials.
Across the board, younger generations are far more likely to say their individual impact doesn’t make a difference, or that certain activities like recycling or using reusable packaging take too much effort.
Gen Z are 3 times as likely as boomers to say that it takes too much effort to recycle (22% vs 7%).
Gen Z are well-known to be very vocal about climate change and environmental issues, so this doesn’t necessarily mean they don’t care. But it does point to the different mindsets across generations.
Perhaps Gen Z feel that their individual impact isn’t enough. And they’re right, to a degree.
An individual choosing to recycle or to use less plastics alone isn’t enough. Action is needed from every part of society, particularly corporations.
Gen Z in particular need support to be able to achieve the world they so vocally push for. Messaging about the impact each person can make, and how this contributes to wider environmental goals, for example, could be a tangible way to reach them.
Manufacturers also need to make recycling easier. Many materials can’t be recycled from home and have to be recycled at special recycling facilities – another barrier.
Let’s take Hovis bread recycling program as an example. Only a handful of locations in central London can recycle this packaging, so it’s not a viable option for many people; particularly those without access to a car, which is more likely for young people.
Lasting change starts at the source.
2020, alongside 2016, was the joint hottest year on record ever.
It’s no wonder that the World Economic Forum Global Risks Report 2021 identifies climate action failure, extreme weather, and biodiversity loss, alongside infectious diseases, as the top global risks for the next ten years.
As grim at it sounds, it’s a much-needed message to spark change. In plain terms: what we’ve been doing isn’t enough, and there’s no time to tiptoe around.
As a result, business actions are increasingly under the spotlight. Around 70% of consumers in the U.S./UK say corporations should do more to address environmental issues.
The top actions consumers want brands to take are to create products with less packaging, or with recycled packaging, and offer more affordable eco-friendly alternatives. Ultimately, real change requires action at the source.
Unless these sustainable options are implemented by manufacturers and brands, the choice to behave more sustainably will be a challenge for most consumers.
Sustainable packaging solutions are arguably even more important now, as the rate of online shopping has increased. With more consumers planning to rely on ecommerce post-pandemic, there’s excess packaging and waste to deal with.
More so than other generations, Gen Z want brands to be more transparent about their sustainability practices and donate to environmental groups.
They want brands to put their money where their mouth is and be clearer about what they’re actually doing. This group are astute and vocal – and they’ll increasingly demand more from brands.
Various CPG and retail brands have made steps in the right direction. Ocado Zoom is trialing several electric and pedal-powered vehicles to make deliveries from its site in London. It also recently launched a dedicated aisle for B-Corp brands. The decision was based around “making greener choices easier for consumers”, which comes back to our point – sustainability needs to be implemented at the source.
Nestle also has plans to use paper-based packaging for all its Smarties products.
Meanwhile, big tech companies like Amazon, Facebook, Google, and Microsoft are all in a race to become the greenest.
These companies have become the world’s biggest corporate purchasers of clean energy. They’re all heavy users of electricity, but their influence to change the entire electricity system is huge, with significant implications for the planet. Not to mention that climate goals are big sources of rivalry between tech giants and other companies as well, highlighting how going green is a key competitive advantage.
It’s too soon to say whether ambitious climate plans will be met. One thing’s for sure though: business as usual has to be a thing of the past.
If we put even a fraction of the collective effort that went into tackling COVID-19 to address climate change, the future will look much greener.