Is Sustainability Important to Consumers?
Why Being Ethical Isn’t More Expensive
In the last decade or so, the issue of sustainability has been a hot topic for businesses and consumers alike. Extensive scientific research has shown the alarming extent of the damage that overproduction and over-consumption has on the planet that many businesses and consumers have started to reconsider their manufacturing and consumption habits respectively.
But do buyers’ concerns pertaining to sustainability ultimately take a back seat to issues about cost? In this article, we discuss several reasons why that’s not necessarily the case.
Because of the damning evidence overwhelmingly illustrating the effects of over-consumption on the earth and its societies, both consumers and manufacturers now have a greater understanding of the negative effects of unsustainable practices, which has led to a desire for more sustainable alternatives.
In fact, a 2020 McKinsey survey found that over 60% of consumers now actively prioritize sustainable products and brands even if they are perceived to be more expensive. But in light of current economic insecurity, do shoppers still care more about sustainability than price?
The straightforward, less complicated answer is “yes,” and there are several reasons why:
Environmental Concerns. Many consumers are increasingly aware of environmental issues such as climate change, deforestation, and pollution. They are concerned about the impact of their consumption choices on the planet and seek products and brands that minimize environmental harm.
Ethical Considerations. Consumers often prioritize ethical practices in the companies they support. This includes fair labor practices, responsible sourcing of materials, animal welfare, and ensuring that products are produced under humane conditions. Sustainability ties into these ethical considerations as it reflects a commitment to responsible business practices.
Case in point, more and more concerned consumers are committing to patronizing Fair Trade products. Under the Fair Trade system, artisans sell directly to wholesalers or retailers and earn fair payment for their products. When you buy Fair Trade clothing, you’re supporting a system that provides fair wages and healthy working conditions to economically disadvantaged artisans worldwide. The payoff is that you get a unique and higher-quality product, such as hand-crocheted, organic cotton sweaters made by artisan cooperatives in Peru and Ecuador or humanely harvested cashmere wool shirts from Mongolia. To find Fair Trade clothes, check out the list of retailers that belong to the Fair Trade Federation.
Health and Safety. Sustainable products are often perceived as safer and healthier alternatives. For instance, organic foods are seen as better for health due to fewer pesticides, and eco-friendly cleaning products are considered safer for both the environment and personal health.
Long-Term Viability. Consumers are increasingly becoming concerned about the long-term availability of resources, and they tend to turn to businesses incorporating sustainable practices into their manufacturing processes that aim to conserve resources and reduce waste. This ensures that their children and grandchildren will still have access to essential resources like clean water, energy, and raw materials.
Brand Trust and Reputation. Companies that prioritize sustainability often build stronger trust with consumers. Shoppers interested in the economic benefits of sustainability are also more likely to be loyal to brands that align with their ethical and sustainable values. When a brand demonstrates a commitment to environmental and social responsibility, consumers are more likely to support them through their purchasing decisions. Studies such as a 2020 report by Capgemini Research Institute support this hypothesis by finding that 77% of consumers were more likely to buy from and remain loyal to brands with a social responsibility pledge.
Regulatory and Market Pressures. Increasingly stringent regulations around environmental impact and consumer expectations are pushing companies to adopt sustainable practices. Consumers, in turn, are becoming more informed and demanding in their choices, encouraging businesses to be transparent and accountable.
Columbia Sportswear, for example, is a major apparel retailer that assertively promotes transparency in its business practices by publishing annual reports. These reports detail at length their corporate responsibility initiatives, such as programs to recycle materials, reduce packaging waste, empower communities in their supply chain, and implement eco-friendly practices in their operations.
Cost Efficiency. While the general thought is that sustainable, responsibly manufactured products tend to be more expensive, that is an oversimplified misconception. Sustainable practices, in truth, can actually lead to cost savings in the long run. For example, energy-efficient appliances reduce electricity bills, and recycling programs can lower waste disposal costs. Well-informed consumers appreciate these savings and may prefer products and businesses that offer them.
Growing Support for Small and Independent Businesses. Sustainable shopping is also a good way to support small and local businesses. They tend to follow more sustainable and ethical practices, and supporting them also helps create jobs and generate economic growth in local communities.
Purchasing Power of Younger Generations. A 2023 Harvard Business Review report found that the issue of sustainability not only stood out as a critical driver of consumers’ intent, but that there was an important generational effect that younger buyers’ trust in brands — and their resulting purchasing behavior — is much more strongly influenced by the brands’ positive intent.
The study goes on to find that the purchasing power of Millennials and Gen Z will surpass that of Boomers around the year 2030, with up to $68 trillion in wealth transferring from Boomers to these younger generations by the end of this decade. Furthermore, when Gen Z and Millennial customers believe a brand cares about its impact on people and the planet, they are 27% more likely to purchase it than older generations are — a clear measure of sustainability’s power to drive buying decisions in this huge demographic.
Overall, sustainability has become a significant factor in consumer decision-making across various industries, driven by environmental awareness, ethical concerns, social justice, health considerations, and long-term resource management. Brands that recognize the importance of sustainability and integrate it into their core values and operations are likely to resonate more with today's conscientious consumers, especially with Millennials and Gen Z who will be the largest, most influential, group of buyers in the coming decades.