Consumer Understanding of Corporate Sustainability

By Laurie Demeritt

In today’s marketplace, “green” is in vogue more than ever. With all of the attention given to companies and consumers going green, one would think that by now the term would have diffused into commonplace language, however, the concept of saving the environment is much too large for most consumers to get their arms around. Although sustainability has become a household word for the industry and media, findings show that while consumers are actively engaged accommodating sustainability in their day-to-day lives, the average consumer does not use the term “sustainability.”

When it comes to corporate sustainability, consumer understanding is not grounded in carbon footprints, climate change or specific product attributes. It’s not about “saving the earth.” It hits much closer to home. Preserv-ing a way of life and having control of their surroundings is top of mind.

According to the “Hartman Report on Sustainability: Understanding the Consumer Perspective,” many consumers believe their purchase decisions are at least as important as their votes in affecting social change, and in many instances, they feel purchasing has a greater impact on society than their voting.

Consumers no longer want to shoulder the burden of environmental quality alone. Many feel that since the first Earth Day in 1970, government legislation and regulation has done little in the way of innovation and much in the way of creating bureaucratic organizations. Now consumers are looking to corporations to take a leadership role when it comes to sustainable issues. The rationale: the power of the dollar is mightier than the vote. In hopes of shifting this burden to companies, consumers are expressing their values through their purchases.

Sustainability Consciousness
Although the “Hartman Report on Sustainability” found that just over half of consumers claim any familiarity at all with the term “sustainability,” 93 percent have been found to have some degree of “sustainability consciousness.” This refers to the way people link everyday life to “big” problems (e.g., food, water and air quality). When consumers talk about sustainability, they are communicating six key values: health, local, social responsibility, environmental responsibility, simple living and control.

Consumers within the World of Sustainability have different behavioral and emotional mindsets when it comes to how intensely they are involved with sustainable beliefs and activities, including orientations toward organics and eco- friendly products, with those at the core being most involved. Regarding customers in the World of Sustainability, the study found:

• They are over twice as likely to think it’s important to buy environmentally friendly products (77 percent agree).

• They are nearly four times as likely to pay 10 percent more for sustainability products (75 percent at least somewhat likely).

• They are seven times as likely to think it’s important to buy organically grown food whenever possible (24 percent agree).

• They are over twice as likely to think science and rational intelligence can overcome major problems (27 percent agree).

• They are almost twice as likely to think purchases have an impact on society (75 percent agree).

Mitigating Risk
Sustainability consciousness is not just about “eco-conscious consumers” and the environment; it is broadly distributed across society in the ways people mitigate risk in everyday life. To counteract the risks posed by everyday life, consumers establish habits such as avoiding unfiltered tap water, wearing sunglasses and sunscreens to “block out” harmful UV rays and fastening vehicle safety belts and using child car seats “in case” an accident happens.

Other adaptations to risk only now emerging include practices such as using sanitary wipes on grocery shopping carts, routinely using air filters in living rooms and questioning the purity of water in plastic bottles. These small measures provide entry points for consumer participation in sustainability, even when they may not be familiar with that as a term or the global impact.

As you can see, consumers are beginning to interpret questions of sustainability in more personalized terms as exposure to risks. And as their perception of these risks grow to encompass more and more causes, ranging from antibiotic-resistant bacteria and pollution, to corruption and climate change, their desire to do something about it increases. Right now, our work on sustainability shows most consumers tend to respond to risk in one of five different ways, as characterized in the following table:

You can see now that most consumers are not yet willing to throw in the towel. What we are interested in here is the number one response, “Radical Engagement.” At the heart of this particular attitude is the call to action. There is a felt need by over a third of the population to do something and, by implication, to do it now.


Businesses Taking Responsibility
Without necessarily realizing it, consumers are pushing manufacturers, retailers, distributors and marketers to “do the right thing.” That is, rather than take on the responsibility themselves, individuals are expecting organizations to do so. In our survey of 1,604 consumers, 78 percent agreed that businesses and corporations should provide leadership in the area of environmental protection, and almost three-quarters (72 percent) indicated their purchase decisions have as much, if not more impact on society than their votes. In contrast, only about a quarter (23 percent) explained that whenever they did not base purchase decisions on concerns for social or environmental responsibility it was because they didn’t think they’d have much influence acting alone. What’s clear is that consumers by a wide margin are beginning to incorporate issues of sustainability in their purchase decisions and half of them (53 percent) already feel their decisions are an effective way to express their values (Figure 1).

Being a Good Citizen
When we asked our survey respondents to weigh various criteria for deciding which company would earn their dollars, the message was clear: consumers expect the companies they do business with to act socially and environmentally responsible in very particular ways. For example, more consumers think it’s important for businesses to minimize waste and pollution (62 percent) than to provide good wages and benefits (51 percent). And still fewer think it’s important to maximize returns to investors (20 percent). What’s revealing about these numbers is how the importance of particular practices spreads to more consumers as their impact hits closer to home. A company’s waste and pollution contribute more directly to the risks individuals face than the size of the dividend going to its anonymous shareholders (Figure 2).

Business Practices Considered Very Important in Deciding to Buy a Company’s Products
Taking these results at face value, it would seem the smart thing to do would be to spend more of the profits currently distributed to shareholders on waste and pollution management, but that would be a mistake. Despite what consumers say on surveys, we know there is an array of reasons they choose to buy products from some companies rather than others. Consumers are often quite unaware of the actual business practices, good or bad, followed by specific companies, and in many cases they form impressions of what they assume a company’s practices are by what is most visible to them. This could be through contact with employees, experience with particular products, the condition of buildings and grounds, price comparisons, advertising style and a host of other factors. Second-hand information or misinformation spread through social networks also contributes to these impressions. So, before jettisoning current business plans in favor of a wholesale commitment to sustainability, it’s worth reviewing what consumers are communicating.

Given the difficulty of getting self-interested individuals to address sustainability issues, consumers want the businesses that take their money to step up and take on the responsibility. Consumers believe they have the ability to encourage business to act more responsibly through their purchases. In short, consumers are feeling pressure to limit the number and severity of risks they are exposed to daily and are beginning to feel they must persuade business to help them. While it is important to acknowledge the fact that sustainability is becoming increasingly important to consumers, it is not yet a deal breaker for most. Rather, it is a powerful tiebreaker. If you’re in need of something to differentiate yourself from your competition, take a serious look at sustainability.

The “Green” Opportunity
We are experiencing a significant cultural shift in which consumers will continue to adapt their behavior to align with companies, products and services they find to be relevant to their current lifestyle. Companies of all sizes and orientations have the opportunity to partner with consumers to help solve meaningful issues related to sustainability. To connect with consumers, focus on what’s relevant to their daily ways of living.

• Begin orienting company innovation, communication and experiences toward consumer definitions, not industry definitions, of sustainability to ensure all efforts are relevant.

• Focus on a select few (basic) areas tied to products that are driven by people’s desire to be involved in health and wellness and resonate with them on their shopping occasions. Natural and organic products, water filters, air purifiers and sunscreen are all early adoption sustainability products. As consumers become more involved in green lifestyles, they get increasingly interested in locally grown, free-range and wild products.

• Leverage sustainability values in communications, both linguistically and visually, to tap into these desires and emotional aspects of sustainability.

The dynamics of sustainability in U.S. consumer culture will continue to change and evolve. Before framing messages of sustainable values it’s important to find definitions that consumers can relate to.

What companies need to understand, as this new wave of sustainability enthusiasm continues to roll in, is how it unfolds to become active in consumers’ everyday lives. Armed with this understanding, marketers can then devise innovative, relevant and actionable strategies and tactics that resonate with consumers.

Remember, the key is simplicity and easy participation. After all, recycling didn’t work until it went curbside and sorting was simplified.

Laurie Demeritt is president and COO of The Hartman Group (www.hartman-group.com), a leading consulting and consumer insights firm. The Hartman Group specializes in the analysis and interpretation of consumer lifestyles and how these lifestyles affect the purchase and use of health and wellness products and services. Their client base includes a number of Fortune 500 consumer packaged goods companies, pharmaceutical firms, and mass and natural food retailers. She can be reached at laurie@hartman-group.com.