Customers may say they find ‘sustainability’ attractive, but when it comes to actual buying decisions, it’s still all a bit old-fashioned
Consumers have good intentions. Or at least about two-thirds of them do, according to the latest Global Survey of Corporate Social Responsibility and Sustainability, published by market research firm Nielsen.
Nielsen found that 66% of about 30,000 consumers in 60 countries said they would pay more for products from sustainable brands.
Typically there is a gap between what consumers say they will do and what they actually do, so this might be treated with some scepticism. But at least the trend is moving in the right direction. The 66% figure in 2014 compares to 55% in 2013 and 50% in 2012.
Also, according to Nielsen, there is some evidence that “purchasing sentiment” is backed up by actual purchases. In 2013, a selection of brands that promoted their sustainability credentials on packaging, and another group that conducted sustainability-related marketing campaigns, increased their sales compared to the previous year by 2% and 5% respectively.
By comparison, a control group of 14 brands that did not highlight any sustainability claims increased their sales by 1% only. The latest Nielsen survey found similar results for 2014.
For companies wanting to boost their sales, it all sounds remarkably simple: develop a sustainability proposition, market it effectively, watch sales go up.
According to Nielsen, this should work especially well with young consumers and consumers in the Middle East, Africa, Asia and Latin America, who are more likely than their jaded European or North American counterparts to demonstrate “purchasing sentiment” geared to sustainability.
Cause and effect conundrum
But a degree of caution is needed: it is not easy to distinguish cause and effect.
The sales of the group of sustainable brands might not have increased because of their sustainability, but because of other factors. It has long been established that there is a link between sustainable practices in corporations and better long-run financial results – not least through the work of Robert Eccles
at Harvard Business School. But sustainability might be the result rather than the reason.
It is a moot point if companies become more profitable because they prioritise sustainability, or if they become more sustainable because they are more profitable and subsequently invest in sustainability.
It might well vary from company to company, and can depend on issues such as attracting better staff – who might in any case prefer to work for a more sustainable employer, with the effect that sustainability becomes further embedded in already sustainable companies.
Altruism? Maybe not
The Nielsen findings might contain one clue to better sales performance. When asked about the issues they prioritise, sustainability-minded consumers highlighted health benefits, including natural and organic ingredients, over environmental concerns and social values. The difference was significant – health was a purchase driver for 60% of consumers, while environmental concerns were a driver for 45% and social issues were a driver for 41-43%.
This points to a truism that those in the know about consumers and sustainability have highlighted
: by and large, consumers prioritise their own interests (such as their immediate health) over global interests (such as a healthy planet) and finally the interests of people they don’t know.
Companies will reap the rewards if they provide the products that align with consumers’ self-interest.
Of course, the big sustainability issues – such as a healthy planet – are in consumers’ interests. The challenge for brands is to relate this to consumers’ more tangible priorities, such as health, rather than to expect them to make purchase decisions on the basis of the often detached concept of sustainability.