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01.21.2009

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Economic Downturn? The “Green” Turnaround

A “green agenda” has been touted as the way to lead this nation out of its economic doldrums. The belief, in short, is that a healthy environment leads to a healthy economy. It was debated on the campaign trail for months, it played out on election night and now we are at the dawn of a new administration in Washington D.C. that must deliver on its promise of “change we can believe in.”

We all know the enormity of the challenge. The economic news has not been good; in many sectors it is downright bleak. Consumers and companies alike look for any glimmer of hope. Importantly, and related to both consumers and businesses alike, is the fact that some of the only bright lights in the otherwise gloomy economic realities of 2008 can be found in those topics that intersect with sustainability, for example, notions like, “saving energy” and “hope for a better world.”

One such bright spot is highlighted in our new report, Sustainability: The Rise of Consumer Responsibility. Fielded at a time when consumers were just beginning to figure out how to adjust to new economic realities in the aftermath of the collapse of Wall Street stalwarts such as Merrill Lynch and Lehman Brothers, our report finds many consumers still putting money towards purchases that give them hope for the future. In fact, 62% of consumers say that current economic conditions have had no impact on their purchase of sustainable products and 13% are buying more sustainable products now.

The Sustainable Difference

During these tough economic times, sustainable products create that “sweet spot” that make consumers more optimistic about the choices they are making. In many ways, the term “sustainability” has become synonymous with responsibility for consumers: In their words, it’s seen as just “doing the right thing.” More than three-fourths (76%) of consumers consider environment and social aspects at times in making purchase decisions and one-third of consumers (34%) are willing to pay more for that benefit despite the economic downturn. And among core sustainability consumers, 21 percent are actually buying more sustainably.

Although it was not the primary focus of this study, we find that even the best intentioned, most committed sustainability consumers are not immune to changing financial conditions. In such cases when consumers are forced to make tradeoffs, cutbacks are more likely to be made in sustainability product categories that consumers view as less essential. Some of the sustainable categories researched in this study, such as natural, organic or environmentally-friendly food, personal care, and household cleaners, typically remain consistently purchased as consumers perceive them to still be most important to their quality of life.

The report highlights sustainable products that consumers currently own or use in relation to those they plan to purchase. The environmental benefit of these products is central to their purchase decision-making. For example, 47% of consumers say they currently own or use energy-efficient appliances while 7% of consumers say they plan on purchasing energy-efficient appliances this year in 2009. An equal number of consumers own/use recycled paper products and 11% or consumers plan to purchase recycled paper products in the next 12 months.

Great Expectations: You Say “Corporate,” We Say “Consumer” Responsibility

Even in hard times, living simpler, saving energy and volunteerism are consumer sustainability behaviors seen as benefitting the common good. Not to be missed is the fact that consumers are increasingly looking to corporations to behave in the same way.

While concepts and ideas like “local,” “Fair Trade,” “cruelty free,” and “transparency” can now be said to be fully operating in the cultural domain, the consumer notion of doing the right thing for the common good is an even stronger guiding principle that establishes hope, even in what seem to be hard times. Importantly, we see consumers seeking out those products, services and retailers that they feel represent forward-thinking, higher domain experiences within which sustainability has profound connections at personal, social and global levels.

Going forward, what we find fascinating, and of great value to manufacturers, retailers and service providers, is that many of the core beliefs and aspirations surrounding sustainability behaviors represent personal journeys for consumers. These philosophically and objectively-driven travels are inspired by not only individual hope for higher quality experiences and standards of living for themselves and their communities, but are quickly becoming a broadly focused expectation to find such qualities reflected in the stores, employees, brands and products they buy, interact with and use on an everyday basis.

Sustainability: The Rise of Consumer Responsibility

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Did you know?

Nearly half of consumers (44%) are confused by the term “sustainability”
Close to three-quarters of consumers do not know which products (75%) or companies (71%) are truly sustainable
About one-third of consumers (34%) are willing to pay a premium for sustainable goods despite the economic downturn
About one in five core consumers (21%) are actually buying more sustainably

Source: Sustainability: The Rise of Consumer Responsibility, The Hartman Group, Inc., January 2009.