Bain & Company’s new CEO Sustainability Guide explores the sustainability concerns of business leaders, their customers, and their employees, concluding that more than 60% of companies are not on track to meet their sustainability goals.
The report also includes a survey of 23,000 consumers revealing that about 64% of people have a strong concern about sustainability. This fact has worsened in the last couple of years, mainly due to the extreme weather conditions occurring in different parts of the world.
For François Vaili, partner and director of the global sustainability practice at Bain & Company, “Executives recognize they have a key role to play in the energy and resources transition, but are concerned about the growing gap between their progress and their public commitments. There are three levers CEOs should prioritize: policy, technology, and changes in consumer behavior“.
The report also clarifies some misconceptions often associated with consumers.
Baby Boomers seem to be just as concerned as Generation Z. According to the survey, 72% of Gen Z consumers and 68% of baby boomers worldwide are very or very concerned about the environment. In the cases of India, France and Japan, baby boomers have a greater level of anxiety.
Consumers are looking for sustainable products and are willing to pay more for them. Consumers in India, Indonesia, Brazil and China are willing to pay 15% to 20% more for sustainable products. In contrast, American consumers will pay an 11% increase, while consumers in the United Kingdom, Italy, Germany and France are willing to pay only 8% to 10%.
There is a disconnect between what consumers want and what sells. 48% of consumers are concerned about how a product can be reused, its durability, and how to reduce waste generated. Instead, most companies base the sustainability of their products on factors such as manufacturing, ingredients, and certified agricultural practices. For this reason, nearly half of consumers in developed markets believe that sustainable living is too expensive, because they confuse “sustainable” with “premium.”
Consumers have difficulty identifying sustainable products and do not trust companies. For 50% of consumers, sustainability is one of the top four purchasing criteria. However, many cannot identify which products are less polluting or understand the meaning of more common sustainability slogans, such as organic or fair trade. Lack of trust is another important point, as only 28% of consumers believe that products developed by large companies are truly sustainable.
The study also reveals that 75% of business leaders believe they have not integrated sustainability well into their businesses. These results can be compared to another analysis from Bain & Company, which indicates that 63% of respondents believe their companies need new skills and strategies to achieve environmental, social and governance goals. Additionally, while almost all CEOs reported a talent problem, 44% of respondents said it is easier to find an opportunity outside the company than within it.
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