5 minute read 5 Jul 2021
EY Lady holding a jar in a bulk shop

How to guide your consumers through the maze that is sustainability

Authors
Silvia Rindone

EY-Parthenon UK&I Retail Lead, Ernst & Young LLP

Strategic mind with a pragmatic spin. Intellectually curious. Mother of two. Passion for art, food and travel.

Ray MacSweeney

EY-Parthenon Associate Partner, Consumer, Ernst & Young LLP

Strategist with 20 years of experience, focused on the consumer products and retail sector. Passionate about sustainability and providing pragmatic strategies that help deliver results.

5 minute read 5 Jul 2021

The EY Future Consumer Index sustainability focus suggests consumers need further information to make more sustainable purchasing decisions.

In brief: 

  • Consumer demand for sustainability is strong, but barriers include cost and complexity, and consumers need increasing amounts of information when making purchasing decisions.
  • Expectations not only differ by product but also by age, with the intention-action gap narrower among younger consumers.
  • Sustainability needs to be embraced across organisations, with retailers and brands cognizant of its influence on purchasing decisions.

Previous EY Future Consumer Index (FCI) bulletins have shown the growing importance of and desire for sustainable consumer choices, evidenced by the trend for shopping locally during the pandemic.

Our seventh survey for the EY FCI takes a deeper dive into the topic of sustainability to provide a fuller picture of what it means to UK consumers, brands and retailers alike.

Sustainability: What does it actually mean?

The UK has pledged to be a world leader in reducing carbon, with legally binding targets on air and water quality, waste and biodiversity set by the UK Government. The EU is contemplating a carbon price on imports of emission-intensive goods. Meanwhile both the UK and the EU are clamping down on plastic waste by imposing stringent new tax frameworks on virgin plastic use.

But as governments define the regulatory environment, what does sustainability actually mean to consumers? Broadly it’s about aiming for a future that balances economic, social and environmental factors. Within each of these three factors is a myriad of sub-topics that consumers perceive as sustainability issues.

The survey identified issues of importance to consumers such as sustainable engagement with ecosystems and preserving bio-diversity (perceived as an issue by 34% of UK consumers) to ending hunger and achieving sustainable agriculture (19%,) as well as the more obvious themes such as climate change (33%).

It’s important that when considering their sustainability strategy, brands and retailers realise that this broad and diverse array of consumer perceptions includes human and societal issues, as well as environmental. 

Factors that influence consumer priorities around sustainability

Consumer expectations around sustainability differ depending on the country a consumer lives in, their age, or the product category they are purchasing.

Both globally and in the UK, climate change (45% and 46% respectively) is of most concern overall for consumers. Plastic waste is also in the top three concerns both globally and in the UK. In the UK wildlife conservation is also a top three concern, while globally water pollution rounds out the top three.

The UK consumer is also concerned about issues including wealth inequality and human rights, although the survey results suggest that they are less passionate about this than their global counterparts.

The impact of age on sustainability concerns

Consumer expectations around sustainability also vary significantly by age and product category or sector, making it vital that brands and retailers are aware of such nuances. For instance, younger consumers under 40 have human rights in their top three priorities, prioritising them nearly twice as much as their older peers. Human rights sit alongside climate change and plastic waste for this age bracket. 

There is also a gap between what consumers say they are willing to do, and what they actually do (the intention-action gap) that varies depending on age and specific actionFor instance during the last six months more than a quarter (27%) of younger consumers have checked the sustainability credentials of products before they have purchased - a figure that’s more than twice the rate of older consumers (13%). Meanwhile one in five (20%) of younger customers have actively researched the sustainability policies of an organisation, also twice the rate of older consumers (10%).

Older consumers are more likely than younger consumers to take tactical actions like recycling or using their own bags when shopping (85% of older customers compared with 61% of younger customers). Meanwhile 12% of younger customers follow a plant-based diet, compared with only 4% of older customers. 

This deeper interest in sustainability by younger consumers translates into some willingness to pay extra for sustainable goods. Once again the intention-action gap is visible here with 47% of Gen Z and millennials saying that they would pay more for products they believe to be sustainably produced, compared with 16% that actually have within the last six months. That compares with 31% of older customers saying they would pay more, but only 10% that have.

Sustainability preferences are tightly linked to category

Sustainability is top of mind in categories related to food. Our research shows 72% of consumers are more likely to consider sustainability when buying fresh fruit and vegetables, 70% when buying packaged food and 68% when purchasing fresh meat, fish and poultry. This isn’t surprising given the push by UK grocers to provide consumers with more sustainable food choices instore, such as British sourced goods.

Awareness and expectations of sustainability are also high in clothing, with 65% of consumers more likely to consider sustainable factors when purchasing.  For beauty and personal care the number is 64%. This is another area where scrutiny has intensified, meaning that retailers have heavily promoted sustainability credentials to their consumers as a result which, in turn raises expectations of standards. 

Defining sustainability expectations and behaviour

When looking at how consumers shop across different categories, their focus on what drives purchase differs. For instance, when it comes to fresh food consumer choice focuses on product origin and provenance, with local sourcing an influence for 24% of consumers and organic production an influence for 12%.

When it comes to beauty, however, consumers are more concerned that such products have been ethically sourced or produced (13%) and that they are sustainably packaged (14%) i.e. whether the packaging is reusable, recyclable or biodegradable.

The changing nature of sustainability spending during the pandemic

Before the pandemic, more than half (53%) of consumers said that they bought sustainable products some or all the time, although how they define that could vary. What is evident however is that  the propensity to look for sustainable products has risen significantly, with more than a quarter (28%) of respondents saying they have increased their purchase of sustainable products over the course of the pandemic and a third (34%) planning to increase it after the pandemic.

Even though sustainable products can come at a cost premium, consumers say that the investment brings a feel-good factor that is important to them, with 28% of those that have bought such goods saying they are playing their part for future generations and 27% feeling that they are contributing back to the future of the planet and society.

Cost is one barrier, but quality of information is another

However, consumers admit cost is a still an issue to be addressed, with more than two-thirds (67%) saying that high prices were a definite deterrent to them purchasing sustainable products. More than a third (35%) wish that they could afford to do more.

But other barriers are also cited by consumers. 64% perceive sustainable options to be of poorer quality while 56% cite misleading product information as putting them off buying.

These two barriers can lead to a drop off in purchasing behaviour. Consumers lose patience, with 37% of consumers saying that understanding how to make more sustainable choices is too difficult or time-consuming. More than half (51%) lack trust in brands and retailers to help them make sustainable purchasing choices. 

The retailer’s role in closing the trust gap to help the consumer make good choices

Consumers cite three main sources of information about how sustainable a product is – they are influenced by packaging claims, friends & family and the news media. Their mistrust, as well as the difficulty of understanding sustainability credentials, suggests there is more that retailers and brands can do to help consumers make sustainable choices, such as improved labelling. This desire for organisations to ‘make it clear for me’ and ‘make it real for me’ is explored further in the latest EY Human Signals research.

But there are other ways that the trust gap can be closed too, proving that sustainability is about action rather than words. Retailers and brands have adopted a range of different pledges to demonstrate their commitment to sustainability and therefore their appeal to consumers wanting to buy.

In the EY teams research, we tested several different pledges to see which would drive the most engagement to buy from consumers. A pledge to ‘donate 1% of profits for the environment, support grassroots protestors, launch petitions for environmental initiatives and use 70% recycled materials’ drove the highest engagement with a 23% increase in consumer preference to shop from the company or organisation concerned.

Pragmatic pledges, such as waiving shipping fees for the delivery of products with less packaging, drove a 15% increase in consumer purchase preference. Meanwhile less measurable pledges, such as a pledge to ‘make a US$2bn climate pledge to ‘decarbonise’ the earth and achieve net-zero by 2040’ drove only a 10% increase in purchase preference.

This shows that the most effective way to engage consumers in sustainability is about combining sustainability goals with financial and activist commitments and practical change.

UK consumers

34%

plan to increase their purchasing of sustainable products and services in the future.

UK consumers

37%

report that understanding how to make more sustainable choices is too difficult or time-consuming.

UK consumers

51%

lack trust in brands and retailers to help them make sustainable purchasing choices.

What businesses must do to support consumers in acting sustainably

Ultimately, our research shows that consumers want to act sustainably, but they aren’t always able to turn those desires into action. They can find the topic and the trade-offs involved complex and confusing and a deterrent from buying.

However, there is a clear prize for brands and retailers that can successfully navigate this maze of consumer preferences. Some companies are waiting for regulation and therefore will follow the lead of whatever rules are set. Meanwhile, others are being much more ambitious in this area and shaping the agenda around the future of sustainability.

Given the increasing consumer interest in sustainability, organisations that are leading will be ready and able to respond to the challenge. Others need to move sustainability higher up the priority list and should consider the following: 

Five ways to embrace sustainability within your organisation
  1. Create an environmental social governance (ESG) agenda that is anchored in the strategy of the business and is not an add-on.
  2. Have clarity about what it is that your target consumer wants in terms of sustainability.
  3. Clearly communicate what is relevant to your target customer, remembering that priorities can differ by age and sector.
  4. Reinforce your brand equity and sustainability communications using external certifications that are most relevant to your consumer audience.
  5. Anchor sustainability into the operations of the business; not just within the board room – particularly in sourcing, supply chain, marketing communication, technology and data.
  • Methodology

    We surveyed 14,047 consumers across the US, Canada, Brazil, the UK, France, Italy, Germany, Spain, Denmark, Sweden, Finland, Norway, India, the UAE, Saudi Arabia, China, Indonesia, Japan, Australia and New Zealand from 16 April to 10 May, 2021. Of those, this article focuses on 1,000 UK respondents. The survey questionnaire covered current behaviours, sentiment and intent.

Summary

The topic of sustainability rose in prominence during the pandemic, and consumer expectations are increasing as a result, creating new opportunity. Consumers are becoming more willing to invest in sustainable options, but there isn’t a one-size fits all approach. Instead, retailers and brands need to tailor their sustainability messaging and actions to their customers’ wants and needs, which can be influenced by numerous factors.

About this article

Authors
Silvia Rindone

EY-Parthenon UK&I Retail Lead, Ernst & Young LLP

Strategic mind with a pragmatic spin. Intellectually curious. Mother of two. Passion for art, food and travel.

Ray MacSweeney

EY-Parthenon Associate Partner, Consumer, Ernst & Young LLP

Strategist with 20 years of experience, focused on the consumer products and retail sector. Passionate about sustainability and providing pragmatic strategies that help deliver results.