THE events of the past year have not only driven consumers to change their shopping habits and tap digital channels, they have also changed the way consumers view their impact on their surrounding environment.
In a survey by IBM Institute for Business Value (IBV), it was found that the Covid-19 pandemic affected nine in 10 consumers’ views on environmental sustainability.
The survey, which covered over 14,000 consumers in nine countries, noted that the pandemic has elevated consumers’ focus on sustainability and increased their willingness to pay out of their own pockets – or even take a pay cut – for a sustainable future.
It added that many consumers were increasingly willing to change how they shop, travel, choose an employer and even where they make personal investments due to environmental sustainability factors.
This poses a call to businesses to relook their processes, supply chains and, even, culture, to ensure that they continue to attract customer and investor attention for the long term.
While SMEs have generally stayed on the fringe in terms of adopting sustainable practices, many small businesses will eventually find that they have no choice but to adapt their operations to be in line with the Sustainable Development Goals (SDG) as larger corporations take action to this end and as consumers increasingly demand such of their companies.
Certainly, this is more so for SMEs looking to export their products and services to countries where consumers have a higher level of awareness on sustainability issues.
“The survey showed respondents worldwide are increasingly concerned about the global climate crisis, and we have also observed businesses in many industries looking to take action to meet their customers’ and investors’ expectations and manage their own environmental goals, ” says Murray Simpson, global lead for sustainability, climate and transition at IBM Global Business Services in a statement.
“We see many companies beginning to make strides to build transparent supply chains or improve energy management to reduce carbon emissions with the help of innovative technologies like artificial intelligence and blockchain, ” he adds.
The survey found that 48% of consumers trusted corporate commitments on sustainability, with 64% of respondents expecting increased public scrutiny in the year ahead.
Despite the Covid-19 pandemic’s financial impact on many individuals, 54% of consumers surveyed said they were willing to pay a premium for brands that are sustainable and environmentally responsible.
In addition, 55% of consumers surveyed reported that sustainability was a very or extremely important factor for them when choosing a brand; this is 22% higher than consumers surveyed pre-Covid-19 pandemic by IBM.
Slightly more than six in 10 consumers surveyed also said they were willing to change their purchasing behaviour to help reduce negative impact on the environment, with consumers surveyed in India (78%) and China (70%) being the most willing.
With regards to travel, almost one in three respondents strongly believed their personal travel habits contribute to climate change.
Note that 82% of consumers surveyed globally would choose a more environmentally friendly transportation option even if it costs more. While only 64% of American respondents agreed to this, 95% of Indian and 91% of Chinese respondents agreed to paying more for a more environmentally friendly transportation option.
Interestingly, even employees are looking for more environmentally-conscious companies to work in.
According to the survey, 71% of employees and employment seekers surveyed say that environmentally sustainable companies are more attractive employers.
In addition, more than two-thirds of the full potential workforce respondents said they are more likely to apply for and accept jobs with environmentally and socially responsible organisations – and nearly half surveyed would accept a lower salary to work for such organisations.
Given that one in four employees surveyed in February 2021 plan to switch employers this year,
companies may face a risk of losing top talents to more sustainability-conscious competitors.
Note also that 48% of all personal investors surveyed already take environmental sustainability into account in their investment portfolios and a further fifth (21%) surveyed say they are likely to do so in the future.
Some 59% of personal investors surveyed expect to buy or sell holdings in the next year based on environmental sustainability factors.