A new report stresses the urgent need to put sustainability on the fast track amidst a groundswell of concern
According to a report by Bain & Company, more than 60 percent of businesses surveyed need to be on track to meet their sustainability goals. However, the report also found that consumers are willing to pay a premium for sustainable products.
The study revealed that many people surveyed in India are highly concerned about environmental sustainability, possibly due to the rising pollution levels in major cities and the increasing incidence of flash floods in different parts of the country.
Consumers in fast-growing markets where environmental concerns are highest, such as India, are willing to pay a greater premium (between 15 percent and 20 percent) compared to markets like the US and the UK. Nonetheless, the report also stated that Indian consumers are still at an early stage of understanding sustainability and that cultural norms and financial realities influence their behaviour.
The report underscored the growing urgency of sustainability topics, with almost 64 percent of people surveyed reporting high levels of concern about sustainability. Most said their worries have intensified over the past two years and that extreme weather first prompted their concern.
The report further revealed that many people surveyed in India said they are highly concerned about environmental sustainability. They are driven to live or shop sustainably first and foremost by direct benefits around savings and health rather than environmental concerns. Consumers express a greater interest in quality, how a product can be reused, its durability, and how it will minimise waste.
According to Karan Singh, partner and head of the Asia Pacific Sustainability Practise at Bain & Company, Indian consumers show growing interest in sustainability. However, there is a noticeable gap between intent and action, mainly due to high prices, limited product information, and availability.
The other key takeaways from the report are consumers' willingness to pay a premium for sustainable products and baby boomers being just as concerned as Gen Z. As environmental concerns grow, consumers want to make environmentally sound choices.
They are willing to pay more for sustainable products. Yet they often run into barriers. For instance, consumers in the US are willing to pay an average premium of 11 percent for products with minimised environmental impact, even as the average premium for products marketed as sustainable is 28 percent.
"Consumers in fast-growing markets, such as India, Indonesia, Brazil, and China, are willing to pay an even greater premium, between 15 percent and 20 percent. On the other hand, consumers in the UK, Italy, Germany, and France are only willing to pay between 8 percent and 10 percent extra," the report said.
The report concluded that progress would require combining technology, policy, and behaviour change. An increasingly conscious base of consumers and employees may prove helpful in achieving sustainability goals.