The COVID-19 pandemic caused a shift in priorities across the world and demonstrated how it is possible to work together when faced with a global crisis. To understand how the events of the last year impacted consumers’ perception of sustainability and social responsibility, the IBM Institute for Business Value (IBV) surveyed more than 14,000 adults from 9 countries (Brazil, Canada, China, Germany, India, Mexico, Spain, United Kingdom, and United States). The full report can be accessed here.
A key takeaway from the report is that brands and businesses need to be aware of a new and increasingly dominant group of consumers whose consumption patterns are heavily influenced by current events and their own personal values regarding both sustainability and social responsibility. IBM identifies this group as the “People + Planet Guardians”, a varied demographic from across the globe who are more likely to live in urban areas than not.1
What is the impact of this for luxury brands and retailers? The report highlighted the following:
- These People + Planet Guardians represent a more general shift amongst consumers towards supporting brands who align with their personal values. Concerns about sustainability and social responsibility are more intertwined than ever; the fight against pollution and climate change cannot be achieved without considering the impact of urban poverty or ethical supply chains.
- More than half of consumers surveyed said that they would be willing to pay a premium for brands that are environmentally responsible. For People + Planet Guardians, these numbers were even higher2:
- 72% stated that they would be willing to pay extra for environmentally responsible brands; and
- 80% stated that they would be willing to change their purchasing behaviour to help reduce negative impact on the environment.
- The COVID-19 pandemic, rather than diverting attention away from environmentalism, created a noticeable a shift in economic behaviour. Faced with increased market volatility, investors appeared to place more importance on environmental, social, and governance (ESG) factors when choosing their portfolios, perhaps suggesting that these were less volatile long-term investments. Consequently, this created an advantage for companies who had made (and publicised) bold sustainability and social wellbeing commitments.3
- Increased concern for well-being, and a desire to find purposeful meaningful work which aligns with personal values, has (and is likely to continue to) impact the job market and talent acquisition. Potential employees are prioritizing job offers from companies they see as sustainable and/or socially responsible. 72% and 68% respectively of those surveyed stated that they would be more likely to apply for a job at an organisation that they consider to be socially responsible and environmentally sustainable.4
- Consumers are increasingly concerned with sustainability when it comes to travel. Around 40% of global consumers surveyed stated that environmental impact factors are more important to them than cost, comfort, and convenience when selecting a mode of transportation.5
It is clear that brands and businesses cannot ignore the impact which sustainability and social responsibility has on consumer, investor, and employee decision making. As all three become increasingly savvier and alert to their own values, brands should capitalise on this trend by creating and publicising their sustainability projects, procurement or wellbeing policies and any achievements in the fight against climate change and social inequality. If the last year has demonstrated anything, consumers are likely to believe that it is possible to set ambitious goals and that brands should be able to deliver their commitments in a shortened time frame.
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