Asia Pacific consumers are a driving force behind the region’s interest in purchasing sustainable goods, showing brands the importance of an ESG focus, said Bain recently when releasing a survey.
Among 16,000 Asia Pacific consumers surveyed, 90% said that they are willing to spend a premium on sustainability products, but don’t buy these goods due to a lack of information or the simple fact that they don’t trust claims of sustainability, the firm noted.
Another barrier consumers mentioned was the low availability of sustainable products, the firm added.
Consumers stated that they care more about sustainability than ever before and that they are willing to spend more, but their actions fall short, which is the disconnect between intent and action—the vexing “say-do gap”—and it is a growing conundrum for all consumer products companies, Bain pointed out.
Brands that successfully close the say-do gap by educating consumers, ensuring sustainable alternative options and availability, driving clear communication, and improving information sources are rewarded with future sales and valuable consumer recommendations, Bain said.
The outlook is bright for winners as 40% of consumers plan to increase their spending on sustainable products in the next three years, according to survey results.
- Asia Pacific consumers care about the environment just as much as their western counterparts and they care even more about health-related ESG matters.
- Across Asia-Pacific, the percentage share of consumers identifying as either environmentally/socially conscious and health conscious was roughly consistent for survey participants aged 18 to 34 years old as it was for those aged 60 years and older (both ~2/3 total market) as well as respondents with lower income and higher income brackets (both between 60 and 70% of Asia Pacific)
Six critical steps to maximise the opportunity
Brands need to have a clear, purposeful plan in place to take advantage of this remarkable consumer opportunity and the winners will drive growth and positive environmental outcomes, Zara Lightowler, Bain & Company associate partner advised.
According to Bain, the following six critical steps allow businesses to maximize on this opportunity.
Set sustainability ambition. Define future-back company ambition on sustainability. Measure progress and identify gaps while setting or adjusting quantified targets and stretch commitments.
Determine swords and shields. Swords are the ESG topics you want to engage consumers on — what you want them to love your brand for. Your Shields sit at the corporate level and protect against downside risk.
Define Corporate ESG solutions. Identify critical ESG solutions to deliver ambition for example to tackle emissions, circularity, sustainable sourcing, water stewardship, health and wellness or diversity and inclusion (the six largest ESG disruptions facing the consumer goods industry)Align critical functions against common mission (R&D, sourcing, manufacturing, digital). Choose partnerships to scale.
Embed ESG in the heart of your brands. Putting ESG at the heart of your brands is critical to generating value from ESG. This requires adapting your brand purpose across the portfolio and embedding this across offer, pricing, in-store and consumer engagement.
Outline roadmap and business case. Define the roadmap and change management plan, outline the business case (both sources of value and cost) and funding model beyond risk (market share gains, cost efficiencies, reduced cost of capital, talent benefits)
Realign the operating model. Achieving this transition will require CEOs and leadership teams to be aligned and champion this.
Revised Operating models will need to reflect the importance of ESG across all levers- from incentives to decision rights and capabilities and talent.