In light of growing environmental concern driven by extreme weather, new research from Bain & Company shows more than 60% of businesses in the GCC region are currently off track to achieve their sustainability goals. The study emphasizes the pivotal role of technology, policy, and behavior change in achieving sustainable practices.
Noting that an increasingly environmentally conscious base of consumers and employees in the GCC may prove instrumental in steering business towards their sustainability targets, Bain’s research has revealed several surprising truths about consumers, dispelling some common misperceptions. Among them, the ideas that consumers won’t pay more for sustainable products and that consumer behavior is fixed.
1. Baby boomers are often just as concerned as Gen Z.
Many companies have long viewed younger consumers as more focused on sustainability than their older counterparts, but the reality is not as clear-cut. For example, 72% of Gen Z consumers and 68% of boomers globally are very or extremely concerned about the environment, but in countries as diverse as India, France, and Japan, boomers are more concerned.
2. Consumer behaviour can change more quickly than many companies anticipate.
In particular, the research notes that external factors such as government regulation can heavily influencing the market. China began offering financial incentives on electric vehicles in 2009; now 19% of Chinese consumers report driving an electric car, compared with 8% of consumers globally. In England, the use of single-use supermarket plastic bags has fallen 98% since the government began requiring retailers to charge for them in 2015. Similarly, in the UAE, the recent imposition of charges on plastic bags in supermarkets has swiftly prompted a notable reduction in their usage, showcasing the significant impact of government initiatives on shaping consumer behavior.
3. There is a disconnect between what consumers want and what most companies sell.
Worldwide, 48% of consumers consider how products are used when thinking about sustainability. These consumers are more concerned about how a product can be reused, its durability, and how it will minimize waste. In contrast, most companies sell sustainable goods based on factors such as how they are made, their natural ingredients, and the farming practices deployed. These factors cause many consumers to conflate “sustainable” with “premium.” One result of this disconnect: Nearly half of all developed-market consumers believe that living sustainably is too expensive. By comparison, roughly 35% of consumers in fast-growing markets believe this.
4. Consumers struggle to identify sustainable products and don’t trust corporations to make them.
In Bain’s survey, 50% of consumers said sustainability is one of their top four key purchase criteria when shopping. Yet they may be making decisions based on misconceptions. When asked to determine which of two given products generated higher carbon emissions, consumers were wrong or didn’t know about 75% of the time. Consumers say they rely most on labels and certifications to identify sustainable products, yet most were unable to accurately describe the meaning behind common sustainability logos, such as organic production or Fairtrade. A lack of trust in corporations compounds the issue. Bain found only 28% of consumers trust large corporations to create genuinely sustainable products, compared to 45% who trust small, independent businesses.
5. Consumers are recommending brands if they support social causes.
As concerns grow, consumers are looking to make environmentally sound choices – 82% of consumers in Europe, the Middle East, and Africa are likely to recommend a brand after learning that it supports a social cause.
To get a broad sense of environmental concerns around the world, Bain surveyed 23,000 consumers. The results underscore the growing urgency of sustainability topics. Some 64% of people reported high levels of concern about sustainability. Most said their worries have intensified over the past two years and that their concern was first prompted by extreme weather.
Akram Alami, Middle East Partner at Bain & Company said: “With the upcoming global focus on the region with COP 28 and the potential implications from this critical gathering, it is critical the CEO’s and Sustainability Plans in the corporate sector take centre stage in the next phase of the world’s transition.”
He added: “Our global report on the topic is grounded on the philosophy of Visionary Pragmatism in this path for executives to adopt as they are navigating taking the global ambitions and translating them into the day-to-day functioning of their respective companies.”