Sustainability is a defining value for the average consumer. Naturally, this is due to the times we live in. Climate change, water shortages and rampant pollution are just a few issues affecting consumers’ shopping habits and purchasing decisions. However, sustainability at the consumer level can only accomplish so much. Consumers know this. That is why consumers are investing in products from corporations that are as genuinely committed to sustainability as they are.
Sustainability and Consumer Electronics
So, why does this matter? There are many opportunities for environmental negligence and harm to be done throughout the life cycles of electronics, appliances, and other consumer technology. The methods and processes behind resource management, manufacturing and production, shipping and the disposal of waste byproducts are important considerations consumers take before swiping their card.
Every retailer should know that sustainability has become a top priority and value consumers hold. Corporations and companies hold a lot of power that even a wealth of consumers do not, especially in lowering their ecological footprint through sustainable business, manufacturing, and production practices. What consumers look for lies in whether corporations and companies have made viable environmental, social and governance (ESG) initiatives.
When assessing a company’s approach to sustainability, one of the best sources to turn to would be its ESG initiatives. Investopedia describes ESG as “a set of standards for a company’s behavior used by socially conscious investors to screen potential investments.” Besides being a way for investors to decide whether to put their faith and money into a specific company, ESG is also a way for regulatory bodies such as the United Nations (UN), the European Union (EU) and government agencies like the Securities and Exchange Commission (SEC) to monitor whether businesses are upholding the policies and beliefs they espouse.
Three attributes make up ESG. Investopedia explains that environmental criteria may include “how a company safeguards the environment, including corporate policies addressing climate change” through actions such as charting a path to reaching a lower emissions goal or achieving net zero emissions by a specific year. Social criteria concern “how [a company] manages relationships with employees, suppliers, customers, and the communities where it operates.” Whereas governance criteria direct “a company’s leadership, executive pay, audits, internal controls, and shareholder rights.” Corporations that enforce these attributes openly with the willingness to be held accountable are where change happens (and where consumers spend their money).
Though each ESG attribute focuses on regulating specific business practices and policies within a company, they all intersect with one another. A company’s environmental policies and practices regarding the extraction of finite resources like conflict minerals, and ensuring employees and shareholders that they are ethically sourced and fair trade, have everything to do with social responsibility and governance initiatives. Staying cognizant of which corporations, companies and brands have ESG initiatives and follow through on them will help retailers build their inventory and inform eco-conscious consumers.
Superficial Sustainability Isn’t Cutting It
Most Americans do not believe the solution to issues relating to climate change should come solely from individual decisions. A Pew Research Center survey conducted Sept. 25 – Oct. 1, 2023, indicated 52 percent of Americans say large businesses and corporations should do more to reduce the effects of climate change.
Purchasing sustainable products is all well and good. However, when the corporations behind those products continue practices that lead to environmental degradation, this contribution does more harm than good. BCG conducted a study that determined around 70 percent of consumers are “wary of corporate claims about progress toward sustainability and suspicious that those corporate commitments are a ruse” to “burnish reputations and attract customers,” a tactic otherwise known as greenwashing.
Corporate Sustainability Sells In More Ways Than One
This is all to say that consumers are putting their money where their beliefs are. NielsenIQ put out the eBook “Sustainability: The New Consumer Spending Outlook” in 2022. NielsenIQ’s data revealed that 78 percent of consumers identify with the statement that a sustainable lifestyle is important to them, and 30 percent are willing to purchase products with sustainable credentials.
Sustainable products from brands and companies that walk the walk when it comes to ESG initiatives sell better. Harvard Business Review states that consumers who like such products quickly become advocates, with 44 percent “recommend[ing] the product to more than 10 people.”
They are even willing to pay more for such products. A Nov. 2023 Bain & Company survey recorded that of the average 28 percent premium on products marketed as sustainable in the U.S., consumers “are willing to pay an average premium of 11 percent for products with a minimized environmental impact.” While the study showed that consumers approach sustainability differently and have varying definitions of the concept, 50 percent “said sustainability is one of their top four key purchase criteria when shopping.”
Consumers do not want empty claims and commitments to sustainability from companies and corporations. They want decisive action and genuine results that demonstrate companies and corporations mean what they say. Consumers also want these companies and corporations to take accountability for past and current actions. Whether conducted on the business, manufacturing, and production levels, consumers need corporations to address these harmful practices and actively take steps to correct them.
To put it simply, consumers want honesty, transparency, and a steadfast obligation to sustainability from companies and corporations.