Consumers give up on governments, turn to companies to save the planet

We know consumers are concerned about climate change. The argument has moved on from whether or not climate change is real to what is the world going to do about it.

The overwhelming majority of consumers in Australia, United Kingdom and USA believe companies have a moral obligation to lead the way on sustainability as corporations are viewed as more likely to have a positive impact on climate change than their own governments. 

The continued failure of governments to act on climate change now sees consumers putting their hope in the commercial sector where they believe there is a greater desire to act quickly. 

Sustainability is now a global social force that cannot be ignored.

Consumers have galvanised their sustainability mindset to use the power of their buying behaviours and decisions to force firms to drive the change they can’t achieve individually.

They require transparency and facts of actions taken for confidence of loyalty. Consumers do not have a good understanding of what it means for a brand to be sustainable.

As such consumers would like companies to be required to report on their environmental impact to help them make better decisions on which companies to support.

Advertising and packaging offer data on a firm’s environmental and sustainability practices.

Advertising that provides information on sustainability can be highly informative, but less likely to be considered truthful and therefore needs to be factual in its nature.

Consumers are not naive.

While the majority firmly believe companies will always prioritise their self-interests over any obligation to society, they also believe companies that have moved early to implement an ethical supply chain do it because they authentically believe it is the right thing to do.  

Companies that take steps to address the climate will be rewarded morally and commercially.

And while scepticism often plagues companies that promote their charitable and community driven activities, consumers are asking companies to declare their views on climate change and to educate them on how their actions are making a difference.

Fifth Dimension is a highly revered and globally focused industry-leading strategic research and consulting agency that has amassed a distinguished portfolio of well-known clients including: Westpac, Coles, HCF, Telstra, Foxtel, Colgate and the Commonwealth Bank. 

Consumers don’t trust gov’ts to act on climate change

Our research clearly shows that 71% of consumers across Australia, United Kingdom and the United States of America agree that the world needs to act on climate change.

But when it comes to acting, 54%, believe it will be companies that will have a greater positive impact on climate change than governments. 37%, believe it is up to governments and not companies to determine how we should respond to climate change.

Belief that the government should take leadership on climate change steadily declines with age as 31% of baby boomers put their faith in the gov’t compared to 43% of Gen Z. 

This research should be alarming for the government.

What we are seeing here is that younger people are saying governments are key to acting on climate change however as they get older their faith in government to be effective decreases and they turn to the private sector to counter ineffective governments.

Will people lose faith in gov’ts to act on the greatest moral challenges of our time? Will we see greater reliance placed on the private sector to step-up and take over the role of gov’ts?

Climate change will be a litmus test for gov’ts to put citizens before their own self-interests.

Moral obligation to act and report on this

Australians are the strongest believers that companies have a moral obligation to become sustainable at 70% agree compared to United States of America citizens at 60%.

There is scepticism around the motivations of companies to prioritise their own self-interests.

However, 48% believe that companies that are currently moving to act on climate change and implement things like ethical supply chains are doing it for authentic and benevolent reasons.

With our research, we believe the early movers are more likely to gain a preference and differentiation in the market for being authentic in communicating around sustainability.

60%would be better off if all companies were required to report their environmental impact.

64% of Australians are of this view, slightly higher than in the United Kingdom, 61%, and the United States of America, 56%. The challenge is what standards can be put in place to ensure consistent reporting of how sustainable a company is and how the claims can be validated. 

Advertising and packaging should be used as a vehicle for communication of sustainability information

The research found the desire for brands to communicate their actions. Consumers want more transparency and informative messaging from brands around their sustainability practices.

46%, state that advertising and packaging are good sources of information on environmental and sustainability practices. This is consistent in all countries and across generations.

What is interesting is that globally, consumers believe advertising is generally informative, 49%, but only one in three, 33% believe advertising is generally truthful.

We see the same pattern where data provided by firms on sustainability and environmental practices in advertising is considered informative, 47%, but less likely to be true, 39%.

Baby boomers are far less likely to believe information in advertising compared to Gen Z and Millennials who are far more likely to rely on advertising as a key information vehicle.

The challenge for companies is how do they communicate their positive actions.

In Australia, 56% have a good understanding of what it means for a brand to be sustainable. Baby boomers have the weakest understanding, 48%, and millennials the strongest at 67%.

The average Australian has a significantly greater understanding of how a brand can support equality and diversity than they understand how a brand can be sustainable.

Consumer sustainability mindset now influencing path to purchase

Fifth Dimension’s sustainability research demonstrates that sustainability is becoming increasingly important for consumers and is now part of many people’s path to purchase.

We are clearly moving to a world where sustainability will be a key decision factor for consumer brand choice and a point of competitive positioning.

54% of Australians, said a brand being honest and ethical is very important when choosing a provider, while one in three, 32%, said sustainability practices were very important.

And it does not matter the industry you operate in as the same desire to buy from sustainable brands is in banking, 36%, supermarkets, 32% and telecommunications at 28%.

What will be the value of a brand being able to state in their advertising and print they are carbon neutral on their packaging and what will be the cost for brands that cannot?

With increasing commoditisation this is the next point of difference for brands; one that can truly connect consumers and brands through shared values. 

Fifth Dimension Consulting is highly respected

Fifth Dimension has been recognised for its groundbreaking work receiving multiple awards including: three prestigious 2021 FORSTA AIR (Achievement in Insight and Research) Awards including Judges Choice, a 2021 Confirmit ACE (Achievement in Customer Excellence) Award in the Innovation category, and a 2020 Confirmit AIR Insight and Research Award.

Fifth Dimension was included in the 2020 GreenBook Research Industry Trends (GRIT) Top 25 Strategic Consultancies, as one of the most innovative companies to make the list.

Fifth Dimension’s four pillars of expertise have continued to evolve new capabilities to embrace uncertainty and drive the development of market leading approaches: strategy, experience, research and technology.

Lyndall Spooner is the Founder and CEO of Fifth Dimension and has over 25 years of experience in consulting and research services and is considered an expert in the field of strategy, research and customer experience.