Most Australians (78 per cent) are willing to pay a premium for sustainable products, but don’t buy them because of conflicting, or a lack of, information, research by consulting firm Bain & Company reveals.
In Bain’s latest Asia-Pacific consumer report, Unpacking Asia-Pacific Consumers’ New Love Affair with Sustainability, it surveyed more than 16, 000 consumers in 11 countries and across seven consumer products categories on their attitudes on environmental, social, and governance (ESG) when it came to their purchasing decisions.
Bain said the “say-do gap” between consumers’ intentions and their actions is a major challenge for brand owners.
The report found that Asia-Pacific markets care about the environment just as much as American and European markets but ranked higher when it came to health-related ESG matters.
Of the 16,000 consumers surveyed in the region, 15 per cent don’t buy sustainable goods because of a lack of information, or lack of trust regarding the sustainability of a product; 10 per cent mentioned low availability of sustainable products, and 16 per cent cited price as a barrier.
Bain partner and Asia-Pacific head of consumer practice David Zehner said consumers care more about sustainability than ever before and are willing to spend more, but their actions fall short, creating the “say-do gap”.
The report found that 40 per cent of consumers planned to increase spending on sustainable products in the next three years.
“Australian respondents told us that the ability to understand what was truly sustainable, while processing often conflicting sources of information, are key challenges they face when shopping sustainably,” Zehner said.
Consumers faced multiple obstacles even before they got to the check out, the report said, starting with a foundational understanding of which product characteristics make it more or less sustainable. A key issue the report identified was that consumers felt overwhelmed by information, with more than 90 per cent of respondents consulting at least three sources to find out about a brand and verify its claims.
“By helping to educate consumers and drive clearer, consistent information across all touchpoints like packaging and website, brands can take full advantage of this shopper inflection point and command the market going forward,” Zehner said.
Zehner added that to successfully close the say-do gap, brand owners need to educate consumers, ensure sustainable alternative options and availability, drive clear communication, and improve information sources.
Meanwhile, brand owners readily admitted they have not made as much progress as they hoped and don't know how to move ahead. They are struggling to understand what sustainable shoppers want and why more are not following through on their commitments, the report found.
While many brand owners said they were committed to improving the sustainability of their products and businesses, few had identified scalable solutions to meet their ambitions, and even fewer were confident there would be positive returns on the investments they were considering.
The report said ensuring consumer understanding of sustainability was one of the most fundamental challenges. About 70 per cent of those surveyed failed a simple sustainability quiz, and consumers with higher levels of education, while more confident in their answers, did not fare any better.
Bain also interviewed 20 executives of large consumer products companies. All agreed their company was making sustainability a priority and devoting more time to it, but 50 per cent said they needed a bolder ambition, and all of them said they required significant work to fully embed sustainability into the core of their business.
Bain associate partner and co-author of the report Zara Lightowler said it was up to brands to listen, react, and lead the way by doubling down on ESG initiatives.
“Brands need to have a clear, purposeful plan in place to take advantage of this remarkable consumer opportunity the winners will drive growth and positive environmental outcomes at the same time,” said Lightowler.
Brands that do the best job of closing the “say-do gap” will thoughtfully ease the consumer journey from the consciousness through the purchasing and consumption stages, and embedding sustainability into a brand’s core is critical for consumer products companies hoping to deliver a real ESG transformation.
If brand owners needed more motivation, the report found four out of five environmentally and socially conscious consumers in Asia-Pacific actively recommend sustainable products that they like. Moreover, more than half of these consumers are “super promoters”—meaning that they recommend the product to more than 10 people.
The report recommended six critical steps CEOs could take to make the most of consumers interest in sustainability:
- setting sustainability ambitions;
- determining ESG topics to engage consumers and identifying shields to protect against downside risk;
- defining corporate ESG solutions;
- embeding ESG in the heart of brands;
- outlining roadmaps and business cases; and
- realigning operating models.
