How companies can significantly extend the reach of sustainability
Companies everywhere are facing a new imperative: Help save the planet.
How can leaders and their teams do that? One important way is to expand the number of consumers who make sustainable choices—and encourage them to make those choices more frequently.
There’s good news on that front. Up to 80% of consumers indicate that they already consider sustainability in their day-to-day choices, according to a 2022 Boston Consulting Group survey. But only 1% to 7% say they are paying a premium for sustainable products and services.
Still, companies often focus on the smaller group; they don’t make actionable plans to reach the much larger proportion of consumers who could be persuaded to more fully embrace sustainability.
As the voice of consumers within an organization, chief marketing officers (CMOs) have a unique ability to change that. But CMOs aren’t in this alone. The entire C-suite must collaborate; pricing, innovation, sales, and more must be involved. How can these teams work together to help the 80% of consumers who are already considering sustainability act on their concerns?
Strategies to expand sustainable choices
To begin with, companies must understand the “funnel” of consumer attitudes toward sustainability, from the largest segment to the smallest:
- Depending on the category, 49% to 80% of consumers say they are concerned about the climate and sustainability, according to the BCG survey. Among the categories tested, concern is highest among consumers in the car and electricity-provider categories.
- Up to 60% of consumers say they are adopting sustainable behaviors, which include day-to-day behaviors such as promptly switching off lights and fans when not in use, washing clothes in cold water, and avoiding food waste. Electricity provision, home care, and dining out are the categories that show the highest adoption of sustainable habits.
- Up to 18% say they are acting on their sustainability concerns by making sustainable purchases, with the highest percentages seen in the dining out and home care categories.
- At the bottom of the funnel, 1% to 7% of consumers say they are paying a premium for sustainable goods and services—with leisure travel on the low end and home care on the high end.
It’s time for companies to look beyond the bottom of the funnel. Consumers in each of these groups have the potential to make sustainable choices, but leaders must use specific strategies for reaching them. And that requires a deep understanding of consumers—the core needs that drive their purchasing decisions and the barriers that prevent them from choosing sustainable products and services.
To reach consumers who are “concerned” and “adopting,” companies can:
- Break the tradeoffs. Why do consumers hesitate to purchase certain sustainable products and services? Sometimes it’s a matter of awareness and access. Sometimes, consumers don’t have positive perceptions of certain sustainable products; they assume that sustainable products have limitations—sustainable skin care products are perceived as not being convenient or “trendy,” to give one example. Sometimes the products or services have real shortcomings—a lack of variety among sustainable snacks, for instance, or paper straws that don’t work well. But sometimes the reason might be a misperception—for example, BCG found that consumers who don’t buy sustainable products and services think they are more expensive than they actually are.
When consumers hesitate for any of these reasons, companies can help them break the tradeoffs—by addressing real shortcomings through innovation and perceived shortcomings through messaging and marketing.
- Broaden the dialogue. When consumers are choosing which product or service to purchase, “sustainability” is among the top three deciding factors only 7% to 16% of the time, depending on the category. But many more consumers (20% to 43% across the categories tested) might make sustainable choices based on other highly relevant needs that are related to sustainability.
Just 7% of consumers cite sustainability as a top-three consideration in purchasing a beverage, for instance. But many more consumers seek beverages that are healthy, high-quality, guilt-free, and socially responsible. Often, sustainable beverages are seen as having those positive attributes. Companies can, in their outreach, broaden the dialogue to emphasize those related consumer needs—and thereby attract purchases of sustainable products even when sustainability is not a primary driver.
Courtesy of BCG
And to reach consumers who are “acting” and “paying,” companies can…
- Make claims locally relevant. Companies can expand the participation of these consumer segments by using language that will really resonate with them. (Always, though, claims about sustainability must be legitimate and based in fact; consumers are wary of the possibility of “greenwashing.”) The language that works best in skin care, for example, is based on ingredients—both the absence of bad ones and the presence of good ones.
- Further, product claims resonate best when they are developed with a sense of the language and considerations relevant to particular markets. For instance, Japanese consumers have expressed particular concern about packaging, so emphasizing the use of recyclable, reusable, or compostable packaging is likely to be effective. In Brazil, claims about protecting forests are particularly meaningful to consumers.
The key role of CMOs
Consumer choices are powerful. They can make or break products, services, and companies—and perhaps climate and sustainability efforts, too. Without the participation of mainstream consumers, companies cannot make a significant impact through sustainable strategies. Consumers are therefore the key to taking green mainstream. All of the C-suite can help turn this opportunity into reality, creating wins for both the environment and the company’s bottom line. (It’s worth noting that sustainable products and services have higher net promoter scores relative to non-sustainable alternatives.)
But in the effort to help consumers step up to make more sustainable choices, it’s imperative that CMOs and their teams take advantage of their unique perspective to step up, too. They’ve got the essential view and voice to be the crucial interface with consumers:
- They see the core market in detail. They are the closest to the consumer, and they have a deep understanding of what consumers want. As such, they can work with other teams within the company to shape sustainable offerings to meet those needs, overcoming real barriers to uptake and addressing misperceptions that also stand as barriers.
- And they can speak to that core market in direct and personalized ways, giving consumers the information they need to help them see the value of sustainable products and services—and choose them.
Kanika Sanghi is a partner and director in the Mumbai office of Boston Consulting Group. Aparna Bharadwaj is a managing director and partner in the firm’s Singapore office. Lauren Taylor is a managing director and partner in BCG’s Dallas office.
