Businesses need to do more than present sustainability as luxury product

29 May 2024 Consultancy.uk 4 min. read
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The importance and focus on sustainability is increasing in the eyes of consumers around the world – and more and more are trying to do their own small part. But amid a sustained assault on their pay and living conditions, the number of people willing to pay extra for green products is stalling – suggesting businesses and governments need to finally find a way to decarbonise consumerism in a way that doesn’t simply pass the buck to shoppers.

Coming out of the lockdown months, a growing number of celebratory reports noted that consumers in markets like the UK, US and Australia had finally reached a ‘tipping point’, where the majority would no longer be willing to engage with products that had negative impacts on the world.

Buying into the sentiment that had trended since the turn of the century, that consumers ‘voting with their wallet’ could change the world, the overriding sentiment of these studies was that it would now be a matter of time before companies had to change their ways – and those that did not would face an uncertain future.

Businesses need to do more than present sustainability as luxury product

However, many of the reports also centred on consumers being willing to pay a premium for sustainability – treating the future of the planet as a luxury extra. After another three years of economic turmoil, however, this seems less and less grounded in material reality.

While more consumers than ever say sustainability resonates with them, and they are taking steps to try and address it in their lives, the idea they would subsidise billion-dollar companies to try and avert ecological catastrophe is no more attractive than it was last year.

Outlining this key contradiction in business’ current pushes to go carbon neutral, L.E.K. Consulting’s ‘2024 Global Consumer Sustainability Survey’ has revealed that consumer sentiment around sustainability is clear. Of 10 countries around the world – Australia, Brazil, China, France, Germany, India, Japan, Spain, UK and US – 67% of consumers said that sustainability was a core value and integral part of their life. An additional 26% said that sustainability was at least somewhat important to them.

Businesses need to do more than present sustainability as luxury product

Source: L.E.K Consulting, Global Consumer Sustainability Survey 2024

While that figure fell when L.E.K. concentrated on the UK, US and Australia – the three original markets the firm has been keeping tabs on for the last five years – the percentage is rising. In 2019, just 50% said sustainability was a core value for them, and 35% said it was in someway important. Now, the number agreeing it is important has risen to 92% – including 62% who say it is a core value.

Responsible consumption

Looking across the pool of 5,000 people, L.E.K. found that 86% of consumers still say that responsible consumption is a top definition of sustainability. However, there are now equally large emphases on collective action – and what polluting industries need to do without depending on consumers. The same 86% majority also said that manufacturing industries becoming sustainable, and energy companies providing clean power, were key aspects of environmental change.

As to how these changes should be obtained, it seems that most consumers do not feel they can further accommodate price raises. Overall, 56% said they had were not more or less likely to pay premiums for sustainable products than they were in previous years. While 30% said they were willing to pay even more, 14% also suggested they were less inclined to pay premiums now.

The biggest shifts in opinion also came in more niche markets. Dry pet food and face moisturisers are already defined as ‘luxury markets’, with consumers contained within them who typically have more disposable income than others. Those markets saw more than 30% of consumers willing to spend a premium – boosting the average notably, as no other line of products L.E.K. polled consumers about saw that bar cleared.

Perhaps most notably, after the plastic mania of recent years, only 26% said they were more likely spend extra on a product which found alternative packaging, while 16% said they were less likely to do so – suggesting this should be a given, not a premium extra.

The researchers noted, “Willingness to pay for sustainability has not increased universally, with cost-of-living increases proving a real barrier for some consumers to spend more on sustainability. Just under 30% of consumers have seen their disposable income decrease in the past 12 months, and almost two-thirds say they spend less on sustainable products as a result.”