The Global Sustainability Study 2021, carried out by the consulting firm Simon-Kucher & Partners, has analyzed the way in which consumers view sustainability and the generational differences associated with the willingness to pay for sustainable products and services. This creates both future challenges and opportunities for all companies as the world becomes more sustainable. Consumers also see themselves as agents of change, which implies that they are called to action, so it is urgent that companies adapt to this change in behavior.
Globally, 85% of people indicate that your buying behavior has changed to be more sustainable in the last five years; however, we observe significant generational differences in this attitude. When looking at both Baby Boomers and Generation X, 24% of each generation has significantly changed their behavior to be more sustainable; this figure rises to 32% for Millennials. Additionally, a third of Millennials will choose a sustainable alternative when it becomes available, while older generations are less likely to actively choose sustainable alternatives (24-29%).
While behaviors towards sustainability vary between generations, they also vary between countries: when looking at consumers who have made significant changes in their purchasing behavior or have completely changed their way of life to be more sustainable, Spain ranks third with 35%. It is preceded by Austria leading the way (42%), followed by Italy (41%) and just behind Germany (34%) In the US, 22% of consumers report major changes in behavior, But that number rises to 55% when you include those who say they have made at least some modest changes.
“Millennials and Gen Z are becoming a force to be reckoned with as they continue to represent a larger proportion of the consumer demographic. Companies that do not have sustainability as part of their core value proposition must act now to protect against future reputational impacts and loss of market share”Said Shikha Jain, study author and partner at Simon-Kucher & Partners. “We’ve been on this journey for a while, but time is ticking and not thinking about the implications could have long-term consequences for traditional companies.”
Across all industries and countries, sustainability is an important purchasing criterion, although price and quality continue to dominate. Worldwide, The sustainability it is considered an important purchase criterion for 60% of consumers. Specifically, in Spain for 36% this criterion is quite important.
More sustainable industries
The behaviors towards sustainability also vary by industry when measuring their importance as a purchasing criterion, from 74% in energy / utilities to 44% in financial services. In addition, Construction / home (66%), consumer goods (63%), travel and tourism (62%) and automotive (61%) are in an intermediate range.
“The relative importance of sustainability during the purchasing process will continue to increase. Today, 50% of consumers rank sustainability as one of the top five value drivers ”, said Andreas von der Gathen, Simon-Kucher’s co-CEO. «As expectations around sustainability rise, companies will face increased pressure to demonstrate their sustainability credentials and continue to make it a central part of their value proposition. “
One third of consumers are willing to pay more for sustainable products, and companies must prepare so that sustainability becomes the expectation rather than the exception in the future.
On average, more than a third (34%) of the population is willing to pay more for sustainable products or services, and those who are willing to pay more would accept on average, an increase in the amount of 25%. Once again, younger generations lead the way, as a higher proportion of Millennials (42%) and Gen Z (39%) are willing to pay for sustainability compared to Gen X (31%) and the Baby Boomers (26%). In terms of price, Gen Z (increase of 32%) and Millennials (increase of 31%) are willing to pay a markup more than double that of Baby Boomers (increase of 14%) and a third more than Generation X (21% increase).
In all industries, willingness to pay for sustainability is highest in consumer goods (38%) and lower in energy / utilities (31%). Interestingly, of the people who are willing to pay a sustainability premium, the premium amount is the lowest for consumer goods (22% on average) and the highest for financial services (27% on average).
“A substantial part of consumers are currently willing to pay for sustainability, which shows that there is a market for ‘green’ businesses on the rise and as a result we see an increase in sustainable businesses around the world. However, as the demand for sustainable products grows and they become the expectation rather than the exception, sustainability will become a board game.Jain said. “Companies must invest, innovate, and transform their business models now to protect their long-term profitability and viability. The rise of sustainable disruptors and increased consumer awareness will serve to drive the expectation of affordable sustainable alternatives. ‘