There are plenty of ways to drive social and environmental change in the modern world, but money still speaks the loudest. As a consumer, your dollars have power, and you may not even be aware of the fact. Indeed, purchasing power is a potent driver of change, and where money goes, industry will follow.
And in recent years, consumers have been leading companies of all sizes towards a more sustainable (and often more ethical) business model. Research indicates that we’re in the midst of a global shift towards increased sustainability in all aspects of life, including what we buy and the brands we support. The majority of consumers, in fact, believe that supporting ethical brands is important, and they may even be willing to pay more money for sustainably sourced products.
Further, these eco-conscious consumers won’t hesitate to drop a company that they believe goes against their beliefs or ideals. In the name of customer retention, numerous brands have thus made efforts to reduce their carbon footprint or otherwise implement sustainable practices.
As an example, in 2017, after observing market trends related to sustainability, the footwear giant Adidas launched its line of running shoes made from plastic waste found in the Earth’s oceans. It takes 11 recycled bottles to craft each pair of shoes, according to the company. The bold move paid off, and Adidas sold more than one million pairs of shoes made from ocean plastic in the 2017 fiscal year alone.
Consumers Driving the Path Toward Industry Sustainability
As people around the world become increasingly aware of how our habits can harm the environment, there’s no excuse to maintain an unsustainable lifestyle. The good news for sustainably-minded consumers is that, even if you can’t afford to be environmentally conscious in every aspect of your life, you can still do your part to cultivate change.
Here’s what you need to know about the true power of the consumer, and how your shopping habits can help the environment.
How to Make the World a Better Place: The Rise of the Sustainable Consumer
When discussing the balance between cost and ethics, it’s important to remember that sustainability is not just a trendy buzzword. Although the push for sustainability initiatives on a large scale is a recent phenomenon, the concept of sustainable business dates back to at least 1994. That year, a British consultant named John Elkington came up with the so-called triple bottom line concept.
Elkington’s three-tiered approach is now the standard for companies looking to implement sustainable business practices. According to Maryville University, the three pillars of sustainable business are people, profits, and the Earth itself. Put simply, “a sustainable business earns profits by being socially responsible and protecting our use of the planet’s resources.” Some just do it better than others.
In some cases, a company’s commitment to sustainability is readily apparent. Take alternative energy suppliers, for example: Whether you’re interested in improved energy efficiency for your home or from your favorite brands, you can expect that sustainability is a crucial part of every renewable energy company’s business model. While housing professionals claim that solar panels are the most cost-effective way to reduce your carbon footprint, wind energy and hydropower are also viable options among home and business owners alike.
When it comes to renewable energy among major companies, there are several notable standouts, and there’s plenty of information out there to help savvy consumers make eco-conscious, ethical purchasing decisions. In April 2022, for instance, the U.S. Environmental Protection Agency (EPA) released its Green Power Partnership National Top 100 list, which ranks companies based on their use of green power.
Interestingly, several tech companies came out ahead in the green power game, with Apple Inc., the Intel Corporation, Google LLC, T-Mobile, and AT&T all placing in the top 10. Microsoft took the No. 1 spot, as the technology and telecom giant offsets a full 100% of its energy usage with renewable alternatives. That’s an impressive amount of kilowatt hours (kWh) — more than 8 billion kWh annually.
Effects from corporate sustainability initiatives of every size can be seen across the supply chain. The aforementioned companies don’t stop at alternative energy, much like the modern consumer, even utilizing their own purchasing power to fuel sustainability across industries. Since at least 2019, major purchasers have been more mindful of the potential economic and environmental consequences of their buying decisions. That year, 73% of major purchasers either changed suppliers or thought about doing so, due to environmental performance.
What You Buy Matters: How Trends Impact Consumer Behavior
Although the intentions of corporate sustainability initiatives are typically genuine, green energy’s popularity among companies of all sizes can be largely attributed to the everyday consumer. A 2019 Bloomberg press release indicates that more than 40% of consumers support widespread renewable energy generation. What’s more, “consumers have become more environmentally conscious and now expect the companies they use to share that same concern.”
While the aforementioned study involved utility companies rather than retailers, the numbers are indicative of an overarching trend. As an example, brand purpose is increasingly important to the modern consumer, many of whom want to support companies that have a purpose beyond revenue. According to Statista, 45% of consumers surveyed want to support brands that are sustainable or otherwise environmentally responsible. The survey was conducted among global consumers from 28 countries, which is a strong indication of an increasing worldwide demand for sustainable products.
There’s also evidence to suggest that consumers even want their money itself to be sustainable. Digital transactions, like buying a pair of headphones online or renewing your streaming subscriptions, virtually eliminate the need for paper receipts, for instance. Mining cryptocurrency may also be a sustainable eco-friendly alternative, as long as the company utilizes green energy for their power usage, rather than fossil fuels.
Who are the Most Sustainable Consumers?
Social, environmental, and financial trends notwithstanding, consumer behavior can be difficult to predict, but data can help bridge some of the gaps. Sustainable business is important to people from all walks of life, but it’s Gen Z that is poised to become “the sustainability generation.” Forbes reports that Gen Zers often make purchasing decisions based on their personal values and principles, rather than just product quality and price. They’re also reportedly willing to pay upwards of 10% more for sustainable products.
Examples of Consumers Making a Difference
Across industries, the market has long been swayed by the opinion of consumers, as well as the causes that are important to them. It’s difficult for a company to make money if its customers aren’t happy.
Here are a few times when companies listened to customer feedback, to the benefit of the triple bottom line: People, profits, and the planet.
McDonald’s UK Switches to Paper
In a campaign fueled by consumer calls for improved sustainability, all McDonald’s restaurants in the UK swapped out single-use plastic straws for paper ones in 2018. The move was made to offset the reported 1.8 million straws used daily by the chain, the bulk of which end up in our oceans and can harm wildlife.
Sustainability is Beautiful
For young men, makeup companies can fly under the radar, but Estée Lauder hopes to change all that. Over the years, the renowned makeup brand has evolved in response to the self-aware, eco-conscious consumer. Estée Lauder’s sustainability efforts include ingredient transparency and sustainable packaging. In addition, the company is committed to reducing its carbon footprint and even achieved NetZero1 carbon emissions in 2020.
Market Changes: Cause and Effect
Not all consumer-led product and/or brand changes involve sustainability, however. Consumers may also be prompted to jump ship when a company changes hands, or even worse, alters a product’s recipe.
A 2017 recipe change to the Nutella company’s flagship product, for instance, caused outrage among its loyal supporters, who took to the internet in droves to make their unhappiness known. As Nutella faced several legal challenges in subsequent years (unrelated to product flavor), however, it’s difficult to determine whether the negative press impacted company sales.
Speaking of change, the world has seen an ever greater emphasis on sustainable business in the wake of the ongoing COVID-19 pandemic. Location has a big part to play as well since a business cannot meet its sustainability goals in an area with poor infrastructure, or that lacks renewable resources. You may have seen a similar phenomenon at the consumer level. If your community lacks a recycling program or otherwise overlooks environmental issues, it may be difficult or impossible to support local sustainability initiatives.
Conversely, in areas that are already sustainably minded, with plenty of alternative energy access and improved bicycle infrastructure, for example, it’s easier to find ethical businesses. In addition to reduced pollution, studies show that bike-friendly cities have macroeconomic benefits as well, as consumers in walkable communities tend to spend more money than their emissions-heavy counterparts.
How to Make the World a Better Place? Overcoming the Challenges of Sustainability
Interestingly, sustainable business does have its fair share of skeptics, and some critics believe that environmentally friendly products are cost-prohibitive to the average consumer. Generally speaking, sustainable products do indeed cost more than traditional ones, and inflation is rising at an unprecedented rate. So, is there any merit to the idea that adopting a sustainable lifestyle is only possible for the affluent? The answer may surprise you.
When discussing the affordability of a sustainable business model, we must first look to the company itself. The unfortunate reality is that small companies do indeed find it more difficult to implement sustainable policies than large corporations with a bigger bottom line. When single-use utensils and packaging were banned in the city of Seattle, for example, many small business owners were unable (or unwilling to make the switch.
Further, compliance with the single-use ban was much greater among business owners in wealthy Seattle neighborhoods. In District 7, home to some of Seattle’s most affluent communities such as Queen Anne and South Lake Union, 90% of business owners complied with the law, compared to just 22% overall. As Kate Erickson at The Falcon writes, “this not only shows that wealthy businesses can afford mandatory products, but also shows that the cost of operating in other Districts is likely too high to have the ability to afford switching to the new mandatory products.”
No matter where you live, however, and even if you’re on a fixed income, your purchasing power still has merit. In terms of sustainability, you can make a big difference by being mindful of the companies you support. By spending money on sustainable products, you’re taking the first step towards a better, healthier world.
Much like there are numerous ways to transform your living space into an eco-friendly sanctuary, you can help cultivate market sustainability via a variety of methods. For starters, do your research, and determine if your favorite brands are eco-friendly, or if they could be doing better to reduce their environmental impact. Then, make your voice heard, using social media and your hard-earned cash to continue down the path toward overarching industry sustainability.