Sustainability is never far from the news headlines. Devastating floods last year in Pakistan and this year in Brisbane and Brazil, plus the unprecedented snow disruption across the UK reminds us all of the importance of the changing environment on our lives. Trends in Sustainability, a study by the University of Leeds reports that global media coverage of environmental issues overtook socio-economic issues in the late 2000′s, peaking during the UN Climate Change Conference in Copenhagen during December 2009.
In this post, Jess Wright, a new freelance researcher working with Juicy explores this timely topic in detail….
The issue of sustainability is a broad one; meeting the needs of the present without compromising those of future generations should force us all to reappraise the demands that we place on the environment, the economy and our society as a whole. But the economy is still suffering from the recession. Unemployment is rising, as are prices, and more households are likely to be adversely affected before things begin to get better.
So has the recession and this period of austerity pushed sustainability issues off of the consumer agenda?
ETHICAL PRODUCTS GAIN GROUND
There’s no shortage of evidence to suggest that ethical products and services – an important aspect of sustainable spending – continue to be an area of growth. The Ethical Consumerism Report from The Co-operative Bank shows that expenditure on such green goods and services increased by 18% between 2007 and 2009. Furthermore, the ethical market in the UK is estimated to be worth £43.2 billion, despite 2009’s 2% drop in overall household expenditure as a result of the economic downturn.
Ethical food flying high
Sales of ethical food and drink rose 27% between 2007 and 2009 to £6.5 billion, constituting 8% of all food and drink sales. But within this increase lie some tell tale signs as to the effect of the downturn in shifting the consumer mindset. Sales of Fairtrade and Freedom Food certified products have excelled, growing 64% and 300% respectively, but sales of organic food have decreased by 14%. Although still worth more in value terms – £1.704 billion compared to Fairtrade’s £749 million and Freedom Food’s £122 million, the decline could be indicative of the perception of organic as something of an expensive and somewhat elitist choice. Couple this with the increasing competition posed by the often cheaper but equally powerful messages attached to other types of ethical produce, the blow to organic sales is understandable.
Growth from personal products with ethics
Personal products, which include toiletries and clothing, were the fastest growing sector, increasing by 29% to reach £1.8 billion. Fueled by a shunning of fast fashion and the increasing acceptance of charity shop finds, the prevalence of highly fashionable yet ethical clothing companies such as People Tree, will have contributed much to this growth. A more stable performance was seen from green home products which grew 8% to reach £7.1 billion.
Services with a halo
Ethical finance was another area of growth. Perhaps revealing how disenchanted consumers are with traditional financial services providers, ethical financial products allow consumers to align their investments with their beliefs – be they human rights, social justice, the environment or animal welfare. The sector grew by an impressive 23% between 2007 and 2009 to reach £19.3 billion, according to The Co-op.
However when it comes to travel, it seems consumers’ beliefs may not prove to be so pressing as their need to get away from it all; a survey conducted by the Civil Aviation Authority revealed that only 7% of flyers are opting to pay the carbon offsetting for the emissions on their flights.
The sustainable consumer
Consumers opting for a ‘Lifestyle of Health and Sustainability’ have become sufficiently important in the US to get their own acronym – LOHAS. With their own dedicated website, Lohas.com, this audience is estimated to constitute 19% of the US population – a market worth £133 billion. Well educated, brand loyal and less price-sensitive than many consumers, LOHAS are highly influential; they don’t just make green purchases, they engage in environmental stewardship. This shift towards looking through a lens which is guided by the fair treatment of communities, people and animals is likely to be a view in which the rest of the world are likely to follow.
THE HEADWINDS
Whilst this evidence suggests that consumers are buying more green products and consuming more ethical food and drink, the advances of green products need to be put in the context of the wider marketplace. According to those figures from The Co-operative Bank, ethical spending in 2009 still accounts for a mere 6% of the UK’s total annual consumer spend of some £700 billion.
For many, the recession has shifted purchasing priorities in a dramatic way; the environment has been put on the backburner whilst more short-term, domestic issues come to the fore.
Price has become the dominant factor in purchasing decisions for UK consumers. Results from The Sustainability Tracking Study conducted by the Direct Marketing Association and fast.MAP express this succinctly:
“78% of respondents surveyed in July 2010 saw product price as more important than environmental issues, an increase from 36% in December 2009”.
A study conducted by Shoppercentric reveals that 55% of shoppers in the UK don’t feel that they can afford to act on their ethical principles.
This sentiment is echoed in the US too with 61% of consumers believing that green products are too expensive, according to the GfK Roper Consulting Green Gauge report.
These barriers to responsible consumption do differ across some regions though. According to Havas Media’s Brand Sustainable Futures report, the dynamic in the UK and US is true of other western economies whilst in fast growing markets, the purchasing barrier lies with unclear and inconspicuous labelling which fails to guide purchase and the larger problem of the poor and inconsistent availability of such products.
However the decision as to whether or not to buy green is taken in the context of other pressures too. There is a level of confusion which exists, scepticism even as to the authenticity of the claims made by brands to entice shoppers into buying ethically. TV programmes such as Hugh’s Chicken Run and The Big Fish Fight attempt to guide consumers when trying to purchase ethical and sustainable foods but they are still finding it difficult when faced with their usual, often cheaper default purchases.
This sense of hesitance and scepticism is also echoed in the US; according to GfK Roper Consulting’s Green Gauge report, 38% of US consumers don’t believe so-called green products are better for the environment.
Shifting Responsibility
Sustainability and environmental stewardship remain demonstrably high on the consumer agenda; 70% of those surveyed by Ipsos MORI in a UK nationwide poll in June 2010 feel that it is their responsibility to help to do something about climate change.
But given the complexities involved in making an ethical decision alone, it seems likely that consumers will increasingly expect brands and corporations to do so on their behalf. Continued take up of sustainable behaviour on behalf of consumers is more likely to come about through product design, and service and behaviour change initiatives. As a result, brands should be making it increasingly easier and evermore enticing to live more sustainably, so much so that it becomes the obvious choice.
This onus of responsibility placed on companies will aid to further shift their corporate social responsibility (CSR) guidelines from mere policies – hidden away in the depths of company information – to those that are truly embedded into the heart of the business and evident at all levels. Nike Better World not only documents the brand’s policies but does so in a consumer-friendly way. This is the kind of information you might find tucked away into any other company’s annual report but Nike document it in a format that consumers actually want to read.
THE FUTURE
Green and sustainability are ‘uber’ macro trends that are definitely set to continue. Adoption of green products and services is dependent on a continued shift in behaviour – by both manufacturers and consumers. And, as the evidence suggests, this change could be a slow one and one with many nuances.
Eric Ryan, co-founder and CEO of environmentally friendly home cleaning products company, Method recently compared the take up of green products to the “Gartner Hype Cycle” of technology adoption in an article in AdAge.
The Hype Cycle characterises the ups and downs experienced as a much-anticipated new technology hits a market. Ryan describes how we have moved past the initial frenzy of media publicity and high expectations following and into a “trough of disillusionment”. This period of scepticism, which many of us now find ourselves in, comes about as products fail to meet our expectations. Essentially we are witnessing the wheat being cut from the chaff, as a number of less-than-legitimate ethical propositions and products fail to deliver and fall by the way side.
All in all, though the future looks bright. In part II, we will highlighting how brands are experimenting with their sustainable offerings and finding ways to practically apply them into more of a mass, not simply niche, market.
Look out for part II coming soon revealing more about sustainable trends in an age of austerity…
You can read more about Jess on the ‘about us’ page.
