Deloitte data says sustainability is expensive for consumers (2024)

FAQs

Deloitte data says sustainability is expensive for consumers? ›

Research by Deloitte, the leading consultancy firm, says that 52% of consumers are yet to create a more sustainable lifestyle due to the cost of eco-friendly alternatives. A slightly higher percentage of people wouldn't hesitate to switch if products were more affordable.

More than four-fifths of consumers willing to pay more for sustainability, even as cost of living pressures weigh. Consumers are increasingly prioritising sustainability in their consumption practices, as almost nine-in-ten (85%) say they are experiencing the disruptive impacts of climate change in their lives.

There are many reasons why sustainable products can be more expensive. The production process involves using quality raw materials that are more expensive, higher manufacturing costs due to the more complex process, following green practices and a lack of demand. Let's delve deeper into the why behind these elements!

78% of consumers feel that sustainability is important. 55% of consumers are willing to pay more for eco-friendly brands. 84% of customers say that poor environmental practices will alienate them from a brand or company.

Because of the increased consumer and employee demand for sustainability, as well as the immense benefits, efforts among organizations to become more sustainable have increased dramatically in recent years. In fact, more than 80% of companies now say they plan to increase investments in sustainability.

A Nielsen study discovered that 66% of global consumers are willing to pay more for products from brands committed to positive social and environmental impact.

The report reveals that 62% of Gen Z shoppers prefer to buy from sustainable brands, and a staggering 73% are willing to pay more for sustainable products. Moreover, Gen Z and Millennials are the most likely to make purchase decisions based on personal, social, and environmental values.

The benefits of moving to a more sustainable future vastly outweigh the costs associated with implementing sustainable practices.

Economic Considerations:

However, over time, sustainable practices can lead to significant cost savings through increased energy efficiency, reduced waste, and improved resource management.

The most suitable approach for pricing a sustainability proposition is to employ a value-based pricing method. This method essentially aims to capture the value associated with a service or product delivered to the consumer, or conversely, the consumer's perception of the value being provided.

Do Gen Z care about sustainability? ›

Gen Z is a highly eco-conscious generation that values sustainability in their purchasing decisions and expects brands to take the lead on environmental issues.

Consumers as a whole are warm to the idea of living and shopping greener. A survey of 10,281 global consumers showed that: 78% agree that environmental sustainability is important, that the concept of sustainability appeals to them, and that they want to lead more sustainable lives.

Key US consumer findings from Stifel's report

Most US consumers (80%) reported trying to be more sustainable in their day-to-day life, 70% care more now about sustainability of products than they did a year ago, and 49% regularly chose more expensive products for the sake of sustainability.

For example, consumers in the US are willing to pay an average premium of 11% for products with a minimized environmental impact. However, 28% is the average premium for products marketed as sustainable in the US.

It may not come as a great surprise that reports point to the fact that Gen Z does care about sustainability more than its older counterparts. 37% of Gen Z in the United States claimed that addressing climate change was their top personal concern. This is compared to just 27% of Gen X and 29% of Boomers.

Sustainability also matters to consumers as individuals. As people become increasingly aware of the impact their choices have on the environment, they seek out products that are eco-friendly and have a lower carbon footprint. The issue of social responsibility is another driving factor for sustainable consumption.

Consumers are willing to pay a premium for sustainable products, 12% on average, but they are still priced too high. As concerns grow, consumers are looking to make environmentally sound choices and are willing to pay more for sustainable products. Yet, they often run into barriers.

In its 2015 Nielsen Global Corporate Sustainability Report, Nielson found that “66% of global consumers say they are willing to pay more for sustainable brands — up 55% from 2014.” It also found that 73% of global Millennials are willing to pay extra for sustainable offerings — up from 50% in 2014.