Sustainability 100+ | About Sustainability 100+
How sustainability is changing consumer preferences

Share

How sustainability is changing consumer preferences

The gradual influence of complex market transformations, social changes and economic dynamics rewire a consumer's mindset. However, sometimes a seismic event such as COVID-19 disrupts the status quo, forcing consumer sentiment to change instantly.

The impact of the pandemic's uncertainty has been felt across the globe; creating a fast-changing narrative. It has sharpened the focus on sustainability vis-a-vis consumers and social purpose vis-a-vis the boardroom. According to a Capgemini Research Institute Consumer and Product Retail Report ‘How Sustainability is Fundamentally Changing Consumer Preferences,' consumers are veering towards sustainable purchases in their daily lives. The pandemic has made these decisions more nuanced and critical in the long-run.

04-How-sustainability-is-changing-

The Capgemini report highlights that a significant 80% of consumers want to make a difference and save the planet for future generations. Other key findings include that 77% consumers seek companies that treat workers fairly, 72% consumers want to limit their environmental footprint and 66% consumers rank environmental friendliness in products or services as high before making a purchase.

Building trust and transparency

The ongoing health crisis has shone the spotlight on scarce natural resources and highlighted big corporations' contribution to this wastage. Customers are cautious about unsubstantiated claims by companies and are keen to separate these corporates from those which are transparent in their commitment to sustainability. According to the Capgemini report, 49% of consumers believe they do not have the requisite information to substantiate claims made by companies on sustainability practices and 44% do not even trust the claims made.

Corporates too have taken cognisance of this. At the 2020 World Economic Forum in Davos, 120 global companies worked towards expanding Stakeholder Capitalism Metrics to sync their reporting with environmental, social and governance indicators, which would enable them to track their course against the United Nations Sustainability Development Goals. With 21 core metrics and 34 expanded discourses, companies now have sophisticated methodologies to measure and communicate sustainable value creation. As more Indian consumers also expect corporates to substantiate their credentials, companies like Nestlé, Reliance Industries and Mahindra Group are embracing these new established standards of corporate social responsibility.

A mindful ‘new normal'

Public concern goes beyond just companies taking empowered action, but also by being part of the solution. The Deloitte report ‘Make it Märkbar: Connecting Customer Engagement with Sustainability' states that successfully engaging with a customer isn't limited to just sustainable products or services, but by enabling them to engage with a brand in a meaningful way by creating new value propositions and communications. Sustainability initiatives that are visible and tangible, empower customers and engage with them emotionally, helping shape their lives and making them feel part of a larger solution.

Through sustainable marketing techniques, companies can create value for the future generations of customers, while building a resilient company. In India, AB InBev, the world leading brewer's global beer brand Corona partnered with Earth Day Network to clean up Mumbai's Juhu Beach on World Environment Day in 2018. This purpose-driven marketing effort helped connect the brand with millennials and Generation-Z, tapping into their core values, while building awareness about the plastic waste crisis and broader environmental concerns.

Green pivot

In the long run, organisations which are agile and learn from the pandemic quickly will survive; it has created a platform for companies to act more holistically and collaboratively, while being flexible. When the crisis hit, AB InBev adapted quickly to help members across its value chain—from small farmers and liquor shops to key vendors and hospitality businesses—to avert a short-term crisis.

At the same time, the company continued to pursue its long-term growth across multiple dimensions, in sync with the United Nations 2030 Agenda for Sustainable Development through its four pillars of circular packaging, smart agriculture, water stewardship and climate action. In line with its commitment, AB InBev has committed globally to purchase 100% electricity for its flagship brand Budweiser from renewable sources by 2025. For the company's Karnataka based brewery in mysore, renewable electricity is being sourced from an offsite solar power plant. In the ongoing pandemic, it is working towards achieving 100% renewable electricity in India by 2025, as part of its agenda of climate action.

AB InBev's aim is to establish a company that thrives for the next 100+ years and beyond. Built on the values of sustainability across everything it does, AB InBev is empowering customers, inspiring employees, building resilience in the supply chain and rooting for communities to build a future-proof business.

Bibliography

https://www.capgemini.com/wp-content/uploads/2020/07/20-06_9880_Sustainability-in-CPR_Final_Web-1.pdf

https://www.mahindra.com/news-room/press-release/anand-mahindra-among-global-business-leaders-to-support-esg-convergence-by-committing-to-world-economic-forums-stakeholder-capitalism-metrics

http://www3.weforum.org/docs/WEF_IBC_Measuring_Stakeholder_Capitalism_Report_2020.pdf

https://www2.deloitte.com/content/dam/Deloitte/fr/Documents/sustainability-services/deloitte_make-it-maerkbar_juin-15.pdf

https://energy.economictimes.indiatimes.com/news/renewable/budweiser-beer-maker-ab-inbev-goes-green-inks-pact-for-renewable-energy/64487326