With consumers grappling with rising costs, just how important is ESG when it comes to their decision-making?
Cowry conducted a piece of preliminary and exploratory research, in the form of an Implicit Response Test with 200 consumers, to measure implicit and explicit associations consumers have with various environmental and social aspects. Ziba Goddard, CEO of Cowry, spoke through a few findings from this research during a panel event discussing how brands can take ESG action in a volatile political and economic environment. Five key takeaways from what she shared were:
1. Consumers do care. One of the main findings that shone through in the results was that consumers really do care. This came through in the explicit responses, but interestingly consumers demonstrated an even higher level of intrinsic care towards the environment. In fact, 86% of people revealed that they are concerned about the environment, compared with 74% who stated this explicitly. This suggests that even in the current volatile climate and cost of living crisis, concern for the environment remains at the forefront of consumers' minds. However, there are many external barriers that prohibit consumers from following through with these positive intentions.
2. Current options are not sufficient. Consumers struggle to align their positive, caring attitude towards the environment with accessible eco-friendly products that are available to them. Implicitly, 80% of consumers showed a strong preference for eco-friendly products and desire to know more about these. However, when asked about eco-friendly products explicitly, consumers were less forthcoming, with only 69% stating that they want to know about these products. This is likely because when consumers have time to reflect and consider the practicalities of current eco-friendly products they become aware of the shortcomings involved with adopting these.
3. Consumers are still open to learning. This however, has not deterred their desire to learn about eco-friendly brands. Implicitly, only 43% agreed that they avoid learning about eco-friendly brands, and explicitly this dropped even further to 26%. This is a strong indication that despite the lack of suitable eco-friendly options available to consumers, the appetite to learn about eco-friendly brands remains strong.
4. Cost an easy excuse? Explicitly, cost was highlighted as the 2nd most important barrier to using eco-friendly products. However, it was only the 11th most important barrier implicitly. This suggests that consumers may be rationalising their decisions not to use eco-friendly products based on costs when in fact, cost is not the biggest barrier to eco-friendly behaviour.
5. Trust is a key barrier. The research found that implicitly, the biggest barriers to adopting eco-friendly choices were tied up in trust and understanding. Implicitly, 50% of consumers do not trust the environmental claims that businesses make, nor do they trust claims from public figures. Consumers also find eco-friendly advice confusing and so most avoid learning more about eco-friendly brands altogether. This underlines the importance of ensuring any claims made by companies are both authentic, but also conveyed in a way that consumers find easy to digest.
In summary, customers do care - importantly on both an intrinsic and extrinsic level. They are concerned about the environment but struggle to find suitable eco-friendly alternatives to the current products they use. This is less likely because of cost, and more likely because they do not trust the environmental claims made by brands and public figures which represents an important challenge (and opportunity) for brands taking ESG action. Despite this, the openness to learn about eco-friendly brands remains strong which should give firms encouragement for their future ESG efforts.