This week we’re bringing you a re-post from our colleagues at Ecolabel Index, an online database that offers the largest global directory of ecolabels.
With raw data showing demand for greener products staying robust in spite of a major recession, researchers are working to question old assumptions about who sustainability consumers are and how they behave. Recently, we have learned about a number of innovative studies, including researching online auction behaviour, that are helping to get a more accurate read on this audience.
Perhaps the most comprehensive is a new primer by Dr. Remi Trudel of Boston U. and released by The Network for Business Sustainability that analysed 91 different studies to understand if consumers will pay more for sustainable products. Interestingly, the answer is yes, and the average premiums being paid are 10%. This is contrary to prevailing wisdom that consumers are not willing to pay a premium for environmental and social goods.
Regardless, a gap continues to exist between the number of consumers with good intentions and the number who actually make greener purchases. What is behind that gap? According to this work, the main issues are:
- Confusion about the product’s sustainability benefits,
- Confusing packaging,
- Trade-offs required to buy the product (like a price premium), and
- Competition between brands.
One of the recommendations for future research is to investigate when and how much companies should communicate their sustainability performance given the risk of being called greenwashers due to over-promoting and the abundance of information now available at people’s fingertips.
We agree more research is needed, and are interested in what benefits consumers value most and whether those benefits match up with the sustainability needs further up the value chain.
In the short term the sector can take action to more clearly communicate to sustainability consumers:
- List a product’s specific sustainability benefits (what makes it better?)
- State the amount that benefit costs (how much more am I paying for that? 5%? 15%?)
Two simple steps that could help grow a market.