Third of consumers willing to pay more for sustainable products
Almost nine-in-ten consumers have become greener in their purchasing in the last five years, offering companies a major opportunity to tap into sustainability demand. A new report has revealed that UK consumers would be willing to pay an average of 25% more for sustainable alternatives to their usual products.
The 2021 United Nations Climate Change Conference (COP26), is the 26th United Nations Climate Change conference. It is currently being held in the city of Glasgow, under the presidency of the UK. With the two years since the largely ineffective COP25, the impacts of climate change have become more evident than ever before – heaping pressure on governments and individuals to do more to offset the looming crisis.
While consumers can only play a small role in comparison to world leaders, or global businesses, consumer consciousness around climate issues has grown exponentially, and the public is determined to do its part. With customers pressuring businesses to make their products more sustainable, many companies might be dreading the costs and challenges this will incur – but they should also be aware this presents opportunities too.
According to a new study from Simon-Kucher & Partners, 33% of UK consumers are prepared to pay more for sustainable products and services. The survey – which questioned more than 10,000 people across 17 countries – further found that those consumers putting their wallets on the line for the planet would be willing to pay an average of 25% more for greener alternatives to their current purchases.
Rosalind Hunter, Partner at Simon-Kucher & Partners, said, “The fact a third of consumers are willing to pay a premium for sustainable products is a ‘green’ ray of light for UK companies… These findings show the clear commercial opportunity from investing in sustainability as well. In fact, companies must invest, innovate and transform their business models now. Increasing consumer awareness will only further drive the expectation for affordable sustainable alternatives.”
Demonstrating the opportunities available to firms which can meet the demand for sustainable products, a majority of 86 % of UK consumers also said they had become greener in their purchasing over the last five years. Sustainability is also rated as an important purchase criterion for 62% of UK consumers.
While sustainability matters more to consumers regarding certain purchases, it is now a major factor in all sectors. For example, three-quarters of consumers said it was key to their energy purchasing, but almost half added the same for financial services provision. With fossil fuel prices currently spiking, speculative investment in the sector is also spiralling – incentivising the further expansion of carbon-intensive industries that accelerate climate change. In this context, financial services providers are not doing enough to rope in sustainably minded consumers.
Indeed, firms across all sectors are struggling to boost their own sustainability credentials. Accenture research recently suggested just 5% of Europe’s largest businesses are on course to become net-zero by 2050. The trend suggests the ‘invisible hand’ of the market may not be enough of a pull to rectify the mounting climate crisis, and lobbying groups are increasingly pressuring world-leaders to use legislation to push businesses to take faster action.
