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‘Business sustainability efforts still falling short of consumer expectations’

New research from Kantar and the Sustainable Business Council (SBC) reveals Kiwi consumers believe business action is falling short of business responsibility, both in terms of climate change and environmental issues and community and social challenges.

The Better Futures 2024 report – now in its 15th year – which surveyed 1,000 New Zealanders, found perceived action by business to be 28% below its perceived responsibility on environmental issues, and 20% below on social issues. The report also found business to be under-performing on transparency of sustainability performance, having an active voice on environmental and social issues, aligning with consumer values, and the treatment of employees.

Jason Cate, Kantar’s Sustainable Transformation Practice Lead, says this year’s results indicate consumers want to see businesses speak up more, be more transparent around their sustainability performance, and use their voice more actively.

“Many consumers want to know more, and we know they connect more with businesses when they tell consumers what they’re doing. However, we also know fear of greenwashing is increasingly holding businesses back from taking their sustainability goals and achievements to the public – and there is good reason for that fear,” Mr Cate says.

73% of consumers surveyed this year are worried businesses are involved in social and environmental issues just for commercial reasons, and 71% feel it’s difficult to tell which products/services are good or bad ethically or environmentally.

Compare that to 67% and 57% respectively from the same questions asked globally, and there appears to be considerable doubt and cynicism among New Zealand consumers around the motivations and actions of business on sustainability.

“Kiwi consumers are more sceptical than their global counterparts when it comes to social and environmental claims. According to the research, greater levels of greenwashing is being perceived by those aged 18-24 and 25-34, indicating this culture of consumer doubt is only going to become stronger as the youth of today evolve into the consumers of tomorrow,” explains Mr Cate.

SBC’s Head of ESG Jay Crangle says this is a challenge many businesses are grappling with as they continue to navigate the complexities of sharing their sustainability achievements and aspirations.

“The good news, however, is we are seeing many of our member businesses rise to this challenge. They recognise how critical it is they share with consumers where they are on the journey, and importantly, that showcasing their ambitions then raises the bar for other businesses.”

Despite high levels of cynicism among consumers, there are key areas in which some businesses are seen to be performing well, including communicating the good things they do, having products and services that value the environment/society, giving back and supporting where it matters, and representing people similar to consumers and their community.

“Many of our members have already ‘picked the low hanging fruit’, so to speak, and are now turning their focus to some of the more challenging environmental and social issues connected to their business, such as their supply chain and their impact on nature. It’s great to see from the report results that the efforts of businesses are being recognised in these key areas,” explains Ms Crangle.

Opportunities to move consumers from emotions to action

For the first time, the Better Futures 2024 report has looked at ‘commitment to sustainability’ as both a state of mind and a behaviour – and in doing so, has revealed an opportunity to convert consumers from passive to active commitment. According to the report, only 7% of consumers who self-qualify as ‘quite interested’ in living a sustainable lifestyle claim to be doing everything they can, with the other 93% saying there is more they could improve on.

“Businesses have a critical role to play in supporting consumers to make better purchasing decisions, not only by striving to provide more sustainable products and services, but also (and arguably more importantly) by aligning their whole business purpose with a more sustainable long-term model,” says Ms Crangle.

“The fact that the majority of consumers interested in living a sustainable lifestyle believe there is more they can be doing indicates there is a real opportunity for business to meet the needs of these customers. Combined with a rebound in overall sustainability commitment, this is a positive sign for business and signals some key opportunities brands can be harnessing.”

Consumers’ top environmental concerns continue to evolve

This year’s report looked at the key environmental issues of greatest concern to respondents, and the results indicate a degree of common ground on issues relating to nature and biodiversity – even among those whose commitment to sustainability is low.

The pollution of lakes, rivers and seas, microplastics in the environment and food sources, and managing our waste stream were among the top five environmental issues for consumers. Other issues like the protection of New Zealand’s biodiversity featured strongly among the environmental concerns.

Social sustainability remains a core focus for New Zealanders, with the cost of living again the #1 overarching issue in 2024, followed by the protection of children and access to affordable healthcare. The 2024 top five concerns for New Zealanders and % change since 2023 are as follows:

 

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