60% of businesses ‘off track’ to meet sustainability goals, despite consumers willing to pay 12% more: Survey

Bain & Company, the Boston-based management consulting company, has said in a new report that more than 60% of businesses surveyed in India are “off track” to meet their sustainability goals despite the consumers are willing to change their behavior and pay more for sustainable products.

To get a broad sense of environmental concerns around the world, Bain surveyed 23,000 consumers, the results underscore the growing urgency of sustainability topics. Some 64% of people reported high levels of concern about sustainability.

“We have spoken to thousands of executives about their sustainability ambitions and the associated trade-offs,” said François Faelli, partner and head of the global Sustainability practice at Bain & Company, the report said adding that “They know they have a key role to play in the energy and resources transition. Many view this as their legacy, but they are worried about the growing gap between their progress and public commitments. While it will not be easy, there are three levers CEOs must prioritize: policy, technology, and behaviour. Bain’s new research offers some promising news for businesses—their customers and employees are adaptable and eager to contribute along the path to progress.”

The report said that driven by the rising pollution levels in major cities and increasing incidents of flash floods and other natural calamities, a large number of people surveyed expressed a high level of concern about environmental sustainability. Almost 64 % of people surveyed said their worries have intensified over the past two years and that their concern was first prompted by extreme weather.

The report said, “Consumers in fast-growing markets, where Bain found environmental concerns to be highest—such as India, Indonesia, Brazil, and China—are willing to pay an even greater premium, between 15 and 20%. Consumers in the UK, Italy, Germany, and France, on the other hand, are only willing to pay between 8 and 10% extra.”

The report further said that 72% of Gen Z consumers and 68% of boomers globally are very or extremely concerned about the environment, but in countries as diverse as India, France, and Japan, boomers are more concerned.

The report said 50% of consumers said sustainability is one of their top four key purchase criteria when shopping. Yet they may be making decisions based on misconceptions. Consumers say they rely most on labels and certifications to identify sustainable products, yet most were unable to accurately describe the meaning behind common sustainability logos, such as organic production or Fairtrade. Bain found only 28% of consumers trust large corporations to create genuinely sustainable products, compared to 45% who trust small, independent businesses.

“Indian consumers show growing interest in sustainability, there’s a noticeable gap between intent and action, mainly due to factors like high prices, limited product information and availability” PTI quoted Karan Singh, Partner and head of the Asia Pacific Sustainability practice at Bain & Company, as saying.

“This presents a distinct opportunity for businesses to take the lead by educating consumers and innovating to offer sustainable products at attractive prices,” Singh added.

The survey found that 75% of business leaders believe they have not embedded sustainability well into their business. The instinct of many CEOs is to prioritize external hiring to address all skill gaps, including sustainability.

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Updated: 14 Nov 2023, 06:01 PM IST

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