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Climate Control: Consumers are discovering their power back circles

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As more of us reassess the ways we spend our money, are we becoming a world of changemakers?

Climate Control: Consumers are discovering their power

Will Covid-19 encourage more consumers to join the ranks of the changemakers, who are exercising their spending power to influence sustainability?

People are reassessing the way they spend their money. New research shows that the more powerful we feel, the more likely we are to make principled purchases — and Covid-19 has reinforced this trend.

About a quarter of people (24%) now believe that the choices they make as consumers can have a significant positive impact on efforts to tackle climate change, according to an ING survey of 4,000 consumers from across Europe, North America and the Asia-Pacific region. Those choices include which products they buy and the extent to which they recycle.

These ‘changemakers’ have been emboldened by the Covid-19 crisis. Nearly three-quarters of them (72%) say their purchasing choices today are more influenced by environmental factors than they were before the pandemic.

That suggests the crisis could prove transformative.

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From pointless to powerful

This momentum will give a boost to environmental campaigners, who have worked hard to overcome the widespread perception that individuals are powerless to fight climate change. That perception has meant that although consumers recognise the need for action, they do not make any changes in their own lives: they do not expect those changes to have an effect, so they worry that any additional costs will be pointless.

“The risk of negative consequences is an abstract statistical concept and in the future, [whereas] the cost of action is upfront, tangible and certain,” says Princeton University’s Elke Weber.1 “That’s a recipe for the status quo — especially in the climate domain.”

Helena Rubinstein, Head of Behavioural Science at Innovia Technology, says we have to harness consumers’ determination2. “We have to somehow remove the hopelessness that people feel, and give them a feeling of control,” she says. “People are saying the pandemic has made them more concerned about the environment, and because of the Covid experience they are more likely to purchase environmentally friendly products. But is the discrepancy between consumers’ intention to purchase sustainably and their actual behaviour going to shrink?”

ING’s research suggests that the intention to purchase sustainably is certainly higher among changemakers. While 57% of all consumers say they would be prepared to pay higher prices for products manufactured in an environmentally friendly way, the figure rises to 74% among the changemakers.

The behaviour gap has also narrowed over the past decade. A study by New York University shows that 50% of sales growth in the US for consumer packaged goods between 2013 and 2018 went to 17% of products marketed as sustainable.3

Forming a green identity seems to be important,” Rubinstein says.

“Seeing yourself as the type of person who is a green consumer and believing that one can make a difference by buying something different might encourage people to do more of it,” she says.

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The new influencers

With the changemakers now accounting for a quarter of all consumers, these kinds of decisions will rapidly make an impact on the commercial performance of businesses around the world, and incentivise those companies to take positive climate change action.

The cost of losing these consumers’ goodwill will be high: 79% of the changemakers say they would be less willing to buy products from companies that do not take their environmental responsibilities seriously. And as businesses are forced to respond to that stance, more and more consumers are likely to feel empowered and become changemakers.

As more people worldwide are emboldened to spend according to their principles, will Covid-19 prove to have been a tipping point in the consumer/brand power balance?

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1, 2 Speaking at a webinar hosted by BehaviouralEconomics.com and ING’s multi-stakeholder open source platform Think Forward Initiative: https://www.thinkforwardinitiative.com/news/2020/what-can-behavioral-economics-contribute-to-tackle-the-threat-of-climate-change

3 https://sustainability.hapres.com/UpLoad/PdfFile/JSR_1204.pdf

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