By Jo Causon, CEO, The Institute of Customer Service
Despite the obvious challenges that we still all face, there are some positives that can be embraced and built upon. One of those is the rise of the green agenda as consumers and businesses become steadily more aware of, and committed to, adopting sustainable and environmentally beneficial practices.
Granted, this in part arises out of another crisis we face – the growing urgency of climate change. But at the same time, it creates a positive opportunity for organisations to review how they operate, define their values around sustainability and re-engage with customers.
We can expect green issues to be high on the agenda this year, with an incoming Biden presidency in the US changing the mood music there, the next United Nations climate summit (COP26) taking place in Glasgow in November, and increasing numbers of governments setting ambitious goals.
At the same time, whilst the Covid-19 pandemic has in some ways pushed the sustainability agenda into the background as individuals and businesses have wrestled with imminent health risks and economic pressures, in other more subtle ways it has perhaps served to advance the issue – by increasing our awareness of the value of sustainable local environments and networks, and by dramatically reducing our transport and travel usage, giving us a taste of what a drop in emissions looks like.
Our new research shows that green is indeed beginning to ‘go mainstream’. Surveying a wide range of executives, business owners, employees and customers, those who pay little or no attention to sustainability issues are very clearly in the minority.
On the customer side, over half (55%) say that in the next five years environmental sustainability will either remain (18%) or become (37%) one of their highest priorities when choosing products or services. A fifth of customers (20%) have deliberately chosen an environmentally sustainable product or service in the last year (with this being most likely for utilities, health and beauty or retail products/services), while 12% have stopped their purchase of a product or service because of its adverse environmental impact.
Price remains an important factor, of course – and our research finds that this is by far the most common reason customers say they have been dissuaded from buying green (59% of responses). But at the same time, a third of customers (34%) say they would definitely or probably be prepared to pay a small premium (of around 5.5%) for environmentally friendly goods or services.
One aspect of our research that I found fascinating is the interplay between customers’ own personal convictions around the green agenda and their expectation that businesses will help them. Three quarters of customers expect organisations to help them make green decisions – 35% of customers expecting this specifically about the products and services they buy from that business, but a further 40% looking to organisations help them become greener more generally, beyond their relationship with that individual business.
This shows very clearly that organisations really need to step up and lead the way with their sustainability strategies and engagement. Whilst our research did demonstrate that most businesses are taking the green agenda seriously, there is further for many to go.
On the positive side, almost 70% of executives and managers believe that sustainability is either one of their organisation’s highest priorities (30%) or will become a leading priority (38%) in the next five years. Over a quarter say their organisation wants to lead the debate on green issues and a third want to help their customers become greener regardless of demand. Over half of senior managers say they would also consider paying a premium for a supplier (of around 7%) if that helped them meet their sustainability objectives.
However, only half of business respondents believe the green agenda is driven at Board level in their organisation. It is concerning that this percentage is not higher, because a sustainability strategy can only really be effective if it is owned and led at the highest level.
Measurement is crucial too – otherwise how can you know what impact your business actually has and whether you are improving? But our research finds that over a quarter of businesses don’t measure their carbon footprint at all, and a further third only measure their own direct emissions. Two thirds of businesses do undertake some form of environmental impact measurement, but only 41% publish an environmental impact report. With transparency and engagement so important, I hope we may see this figure rise in the coming years.
Just like with consumers themselves, there are some early adopters and others who lag behind. This is not a surprise. But I believe that now is the time for all businesses to take action. Those who serve their customers not only with quality and value but with sustainability built in will flourish; while those who ignore the issue are likely to lose customers and market share. The green agenda has moved from a nice-to-have to a core strategic issue. Like climate change itself, it’s something that business leaders simply cannot ignore.