Sustainable consumption a £150 billion opportunity for UK retail
With consumers more concerned than ever by the impact products have on the environment, companies are beginning to feel the pinch of sustainable-focused consumption. While more than 35% of all retail spending is now controlled by customers who are buying more from sustainable retailers, however, issues of inequitable market access mean consumer-driven sustainability drives may be limited in their impact.
In terms of the impact ethical consumerism actually has, purchase-power can only play a small role in battling climate change, when compared to world leaders, or global businesses. Despite this, as leaders continue to struggle to reach meaningful agreements at conferences such as COP26, much of the focus for preventing global climate collapse remains on what ‘conscious consumers’ can achieve.
The latest report to discuss the matter comes from OC&C Strategy Consultants. According to the study, 35% of UK consumers, representing £150 billion of retail spend, are now actively avoiding brands they understand are damaging the environment.
Most commonly, these consumers are driven by efforts to reduce carbon emissions; ensure the use of sustainable raw materials; boost efforts to recycle; and scale down waste products.
While this kind of activity has pushed several leading companies to make notable climate commitments in recent years, the progress remains slow. While the most severe warnings on climate change suggest all major corporations need to have commenced net zero action by 2025 to avert disaster – something some companies like EY have responded to – the vast majority of European companies are not even on target to hit net zero by the end of the decade.
The hope in some quarters is that the coming transfer of generational wealth from Baby Boomers to Generation X and Millennial consumers will fast-track this process. As they become the dominant spenders in the economy, their attitudes to sustainability are already said to be having an effect, according to OC&C. They are primarily behind a shift in behaviour which sooner or later, retailers will have to respond to.
Sohini Pramanick, Partner at OC&C Strategy Consultants, commented, “Consumer behaviour and habits have long been a focus for retailers, however in a post-pandemic world it has never been as important as now. Brands face a tipping point as all generations, most notably older demographics and especially Gen X, are shunning old habits and actively shopping sustainably.”
“It is vital that retailers recognise this change in consumer behaviour and put sustainability front and centre of their business strategy – it’s a positive impact for the planet, makes good business sense and is non-negotiable to the consumer.”
However, this is not to say conscious consumerism is without issues. It is worth noting, it is not a democratic practice: different individuals and demographics have greater say in the market due to their positions of wealth and power.
In a release accompanying the figures, OC&C ventured that changes in Millennial and Generation X spending were “welcome news for the planet given this group has a higher overall retail spend than Gen Z.” While this might seem like a positive at the time, it does suggest progress on sustainability driven by consumers may slow – having to wait some time before Gen Z themselves are the beneficiaries of a generational wealth transfer.
Generational shifts
Beyond that, the extent to which consumers can pressure corporations will meet with a glass ceiling. Amid wage stagnation and huge inflation across the UK, the idea an exponentially growing pool of consumers might be not just willing, but able, to pay a premium for sustainable goods is a distant fantasy. Looking at other research, the number of ‘sustainable consumers’ seems to be plateauing at around a third of the population for that reason.
The profit motive of companies positioned to already benefit from discount retail activity have little incentive to push for net zero to that end. After all, they can count on a sizeable portion of the population having to purchase their goods as a matter of survival, whether they find their sustainability credentials satisfactory or not. With the distribution of wealth seeing wealth-gaps in the UK yawning, and more people dropping below the bread-line, this will likely continue. So, without significantly transforming how the market functions, or how consumers are expected to interface with it, ‘voting with one’s wallet’ seems a questionable method for delivering change.
Importantly, a growing number of UK residents are aware of these limitations. Another recent study, this time by Eden McCallum, noted that as they exhaust behavioural changes as a means to battle climate change, many consumers are considering what larger organisations they are stakeholders in can do to prevent climate change, and ecological destruction. Respondents to that poll said that what companies do, and what governments do, make the most impact on environmental sustainability.
Around 79% of those surveyed said the government actions were most important to boost the country’s sustainability, followed by 76% saying the same of companies – ahead of 72% for individual actions.
