CEOs and Consumers Disconnected on Sustainable Products and Services, Says Accenture, Havas Media report

LONDON, July 15, 2014 /PRNewswire/ -- Only a third of consumers regularly consider sustainability in their purchasing decisions, according to a global study by Accenture (NYSE: ACN) and Havas Media RE:PURPOSE, which reveals the reasons for the disconnect between business and consumer expectations of sustainable products and services.

The report, "From Marketing to Mattering", is based on a survey of 30,000 consumers in 20 countries. The study was commissioned in response and as a companion to the UN Global Compact-Accenture CEO Study on Sustainability, published in 2013, in which two thirds of CEOs admitted that business is not doing enough to address sustainability challenges, similar to the 73 percent of consumers in the latest research that say businesses are failing to take care of the planet and society.

The two studies reveal that, although CEOs see engagement with consumers as the most important single factor motivating them to accelerate progress on sustainability, they are often out of step with what motivates consumers to buy sustainable products and services. 81 percent of CEOs believe that their company's reputation for sustainability is important to consumers, but the new research shows that less than one-quarter (23 percent) of consumers report that they regularly seek information on the sustainability performance of the brands whose products they purchase.

As result of the disconnect on the importance of a company's sustainable reputation, only 32 percent of consumers say they 'often' or 'always' consider sustainability in their purchasing decisions. However, the study reveals opportunities for companies to close the gap and engage consumers by approaching sustainability as an opportunity to bring tangible impacts to consumers' quality of life. It reveals dramatic differences in sentiment and purchasing behavior between consumers in developing and developed markets.

Above all, there is a strong positive correlation between levels of optimism about the future, positive expectations that businesses should directly improve consumers' lives and expectations that they will improve the planet and society. Importantly, these factors also correlate to the likelihood that consumers will actively shop around for sustainable and responsibly produced products and services.

Eighty five percent of Indian respondents and 66 percent of Chinese believe their quality of life will improve in the next five years.  73 percent of Indians and 79 percent of Chinese say they actively buy responsible brands. By comparison, 37 percent of Western Europeans and 51 percent of Americans believe their lives will improve over the same period. And only 49 percent and 44 percent respectively say they actively buy responsible brands.

"Emerging market consumers see a direct link between the products they buy and the quality of their lives," said Sharon Johnson, CEO Havas RE:PURPOSE. "They also suffer the negative consequences of irresponsible production and corruption more immediately.  In mature economies, where these links are weaker, brands can no longer win consumers over by burnishing their sustainable credentials. People know more about products and companies than ever before. To be meaningful today, brands must create products and services that tangibly make a difference to people's lives while fulfilling sustainable criteria. For all consumers, meaningfulness matters. Being a meaningful corporation or brand is not based on how you give money away anymore; it's about how you do business."

The report also highlights two global consumer segments in which sentiment differs. 'Young optimists' between the ages of 18 and 34 are the most engaged on sustainability. Two thirds actively buy sustainable brands and almost a quarter always consider the social and environmental ethics of brands when making purchasing decisions. Sixty seven percent say they recommend brands that behave responsibly. Similarly, 64 percent of mothers, who represented a quarter of the total sample, actively buy sustainable brands and the same percentage recommend those that behave responsibly. 

The study suggests three areas of action that will help companies engage more effectively with consumers: 

1. Companies must promote a commitment to honesty and transparency throughout their organization's operations in order to realize their full value. Trust is critical: corruption is seen as the leading challenge for countries to address, ahead of job creation and economic growth, and ending corruption is seen as a top five challenge for businesses. Companies must be able to hold themselves accountable to consumers who are armed with greater access to information and social media tools that help them expose disingenuous corporate behavior.
2. Companies must meet expectations for responsible business practices while delivering tangible improvements to consumers' lives. This is particularly so in mature markets, where consumers increasingly consider sustainable corporate credentials as a given.
3. Companies must shift their communication with consumers from a focus on their sustainable credentials and corporate performance to a clearer demonstration of their purpose and relevance to the society and the environment. This is especially relevant in emerging markets where companies are seen as playing a major role in improving health, education and other fundamental quality of life factors.

"CEOs told us in our previous research with the UN Global Compact that they struggle to identify the business value of sustainability even though they know that consumers are the most important determinant of their approach to sustainability," said Peter Lacy, Accenture Sustainability Services, Asia-Pacific. "It is clear that many companies, especially in mature economies, need to shift from marketing sustainability performance to delivering innovative products and services that consumers will respond to. In other words, companies must offer improved consumer value propositions in which sustainability is inbuilt, not just a marketing tool."

"Consumers clearly play a key role in helping to motivate corporate leaders to take action, strengthen the business case for corporate sustainability, and directly affect a company's core business and related strategies," said Georg Kell, UN Global Compact Executive Director. "How companies design and develop products and services, and communicate this to consumers, however, will be critical factors on the journey toward driving sustainability based on universal principles into all market transactions."

About Accenture
Accenture is a global management consulting, technology services and outsourcing company, with more than 293,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world's most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$28.6 billion for the fiscal year ended Aug. 31, 2013. Its home page is www.accenture.com.

About Havas Media
Havas Media Group (www.havasmedia.com) is the Global communications group of Havas that unites people & brands through meaningful connections. Driven by Meaningful Brands®. Passionate about Organic Marketing. Operating in 125 countries through three main media brands - Havas Media, Havas Sports & Entertainment and Arena.

About Havas RE:PURPOSE
Havas RE:PURPOSE (http://repurposebiz.com) is a brand consultancy in the Havas Media Group dedicated to helping businesses develop and sustain the most meaningful brands bringing sustainability and responsibility to life for brand users through multi-channel experiences.

SOURCE Accenture