• Climate hub
  • 21 Jan 2022
  • 5 min read

5 consumer sustainability trends shaping the future of business

By Amy Hamilton-Chadwick

Is it sustainable, ethical and responsible?

Consumers want to know more than ever about what they’re buying and investing in.

New Zealanders are increasingly thinking about sustainability, with a survey of Kiwi shoppers reporting that 87% say sustainability is a concern and 71% say they do active research around sustainability before they buy. That’s part of a wider global trend toward demanding higher standards from businesses.

“The message is loud and clear,” according to the World Economic Forum. “Today, consumers around the world do want to live more sustainably. Many expect businesses to play a positive role in society and feel that when it comes to driving positive change, brands bear as much responsibility as governments… Consumer preference is driving entire industries to change, and no market or sector is unaffected.”  

Here are five of the major consumer trends that are likely to shape the future for New Zealand businesses.

1. Carbon labelling gains momentum

Consumers are more interested in the values behind their purchases than they’ve ever been, and carbon labelling is a way for brands to demonstrate their commitment to sustainability. A 2020 survey of over 10,000 European consumers found that two-thirds supported carbon labelling, while research by IBM shows that 71% of shoppers say traceability is very important to them, and they’re willing to pay extra for it.

The introduction of EV’s will be discussed at every level of the business from the boardroom to the water cooler. Fleet changes are often not popular so it’s important the CEO and executive team are on board and prepared to lead from the front.

Small businesses have often been leaders in innovative labelling: back in 2010, Kiwi winery Mobius became the first in the world to display the carbon footprint of each glass of wine. Now the big brands are catching up, too. Unilever has introduced carbon labels for 70,000 of its products, and L’Oreal will provide environmental and social impact labels for all its products by 2030.

Carbon labelling on your products has been a way to make them stand out, but it may soon be an expectation for shoppers around the world. Although it’s a considerable investment, considering your carbon labelling could be essential for the future if it becomes mandatory under legislation, as is happening in France with its proposed ‘carbon score’.

2. Less plastic packaging, reduced waste

It’s not only the labels on the packaging, but the packaging itself that is sending signals to consumers about which brands take sustainability seriously. According to the Sustainable Business Council’s research, “New Zealanders say that reducing packing and plastic best drives perceptions on why brands are sustainability leaders.”

Consumers are judging brands on their packaging: recyclability, lower plastic use and more sustainable materials are all big ticks in a product’s favour. A survey of US customers found 60% to 70% were willing to pay more for sustainable packaging – they want to see compostable or recyclable packaging, depending on the type of product they were buying.

With New Zealand in the process of banning a wide range of single-use plastics, we may well see more legislation around packaging in the future. Be ahead of those changes by improving your packaging before your hand is forced – either by consumer demand or by governmental regulation.

3. Energy efficiency

New Zealanders have been driving less every year since 2016, and that trend has only been accelerated by lockdowns. Kiwis are looking at ways to personally reduce their carbon footprint, by buying more electric vehiclesmore bikese-bikes and e-scooters – and they want to see businesses thinking along the same lines.

Shoppers are more inclined to buy locally than they were pre-pandemic, and they have more questions about how far products have travelled. Renewable energy use in the supply chain is a selling point, and a business with an EV fleet, or making use of other modes of transport, is clearly signalling its commitment to sustainability.

Your business will also be more appealing to employees if it supports efficient modes of transport: EV charging stations at work and showers and changing spaces for commuters who cycle, run or walk.

4. ESG investment grows rapidly

Kiwis not only want to buy sustainable products, they also want to put their money into responsible investments. Companies demonstrating positive ethical, social and governance practices (ESG) are finding it easier to attract investment dollars and grow their businesses.

The Global Sustainable Investment Review 2020 reports a 15% increase in global sustainable investment from 2018 to 2020, and a 55% increase since 2016. Here in Aotearoa, the NZ Financial Markets Authority has issued guidance on responsible investment and default KiwiSaver funds must also exclude some of the most damaging types of investments.

Sustainable investing is becoming an expectation for both institutional and retail investors – meaning that if your business is seeking investment, you need to take ESG factors seriously.

5. Social responsibility

It’s the third element of the triple bottom line: profits, planet and people. Consumers want to support companies which make a positive difference to their communities. US research has found that 77% of consumers are motivated to purchase from businesses that are committed to improving the world, and 25% of consumers said they have zero tolerance for infractions of ethical corporate codes.

The top trends for corporate social responsibility are transparency; green technology; local actions like volunteer events; and diversity and inclusion. For big organisations a lot will be expected, but for smaller businesses it might be as simple as sponsoring an event at your local primary school.

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