Consumers Are the Key to Taking Green Mainstream Hero Rectangle

Less than 7% of Consumers Pay a Premium for Sustainable Products and Services Today, but 40% Could Be Convinced to Make Sustainable Choices

While up to 80% of Consumers Claim They Are Concerned About Sustainability, a New BCG Report Reveals Accelerated Consumer Action Is Needed to Reach Collective Sustainability Goals

BOSTON—Corporate commitments to climate and sustainability are growing in number and scope, but increased consumer action is needed to reach collective sustainability goals. According to a new report released today by Boston Consulting Group (BCG), consumers care about climate and sustainability and want to do their part—yet only 20% said they believe they can personally have an impact. More significantly, 70% admitted to feeling wary of corporate sustainability claims and commitments. The report, titled Consumers Are the Key to Taking Green Mainstream, considers how to accelerate consumer uptake of sustainable products, services, and behaviors.

The report, which is based on a survey of 19,000 consumers across the US, Japan, Germany, France, Italy, China, India, and Brazil, finds that while up to 80% of consumers said they are concerned about sustainability, only 1% to 7% have paid a premium for sustainable purchases. However, focusing only on these two extremes—consumers who are paying a premium for sustainable products and services and those who merely express concern about sustainability—conveys an incomplete picture of consumers’ actual behavior.

“It’s easy to interpret these signals as a lack of consumer readiness, but companies will never maximize the potential of sustainable products and services if they focus only on consumers who are willing to pay a premium,” said Aparna Bharadwaj, a BCG managing director and partner and global head of BCG’s Center for Customer Insight, who coauthored the report. “There’s a significant number of ‘in between’ consumers who are just on the threshold of embracing sustainable products and services. The key question is, ‘How do we encourage these consumers to act?’”

Understanding Consumers’ Thoughts Versus Actions About Sustainability

Of the 14 product and services categories examined in the report, some are more advanced in terms of sustainable action by consumers—offering a significant opportunity for companies to step up.

For instance, in home care products, nearly 60% of consumers said they are already following sustainable behaviors such as recycling products, bottles, and packaging (36%), using reusable cloths for cleaning (35%), and buying refillable cleaning and home care products (29%). In cars, 39% of consumers said they are adopting sustainable behaviors such as avoiding driving or driving only when necessary (38%), or carpooling (14%).

Adoption of sustainable behavior also varies by market. The greatest concern about sustainability comes from consumers in China (93%) for categories such as home care, cars, grocery retail, apparel, and skin care products and Brazil (89%) for select categories including home care, cars, and PCs and tablets. Among developed markets, Italy shows the highest level of concern (87%), particularly in electricity providers, home care, luxury, and PCs and tablets.

Three Imperatives to Motivate Consumers Toward Sustainable Choices

BCG’s report identifies three imperatives for expanding the uptake of sustainable lifestyles:

  • Make claims locally relevant. Companies should speak the language of consumers rather than the language of their internal business team, regulators, or investors. For example, packaging is an issue of particular concern for Japanese and American consumers, so they are more likely to favor products that are recyclable, reusable, or compostable.
  • Broaden the dialogue. Only 7% to 16% of consumers cited sustainability as one of their top three reasons to purchase. However, 20% to 43% could be persuaded to make sustainable choices if the products or services deliver on other related needs. Communicating a broader set of benefits for sustainable products, such as health or quality, could double or quadruple the number of consumers who purchase them.
  • Break the tradeoffs. Companies must understand why consumers hesitate to adopt sustainable products and services and then either innovate to remove real barriers or use communication to address perceived barriers. Price, for example, can be a real tradeoff for consumers. However, BCG’s research shows that consumers who do not buy sustainable products perceive a higher “green premium” than the actual premium that exists. Consumers who are on the fence about making sustainable purchases for cost reasons need to see clearer price communication to combat this misperception.

“By understanding consumers’ core needs, and by removing real or perceived barriers through innovation and communication, companies can significantly increase sustainable outcomes,” said Lauren Taylor, a BCG managing director and partner and global leader of the firm’s customer-centric sustainability topic, who coauthored the report. “Making the attribute of sustainability an ‘and,’ not an ‘or,’ will be a win-win for everyone.”

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