Plenty of shoppers say they consider environmental impact, but in reality price rules supreme, says Jon Entine
Remember the innocent days of the 1980s ethical consumer movement? New Age entrepreneurs rode the green wave into the hearts and malls of the world. The promise? Buying pricey ice-cream or hair rinse made with Brazil nuts (or the stocks of the companies that made those products) would make the world a better place.
That myth crashed. Consumers, it turned out, were not willing to buy idealism in a bottle if it came at a premium. Two decades later, green marketing remains with us, more intense than ever. Is green yet more than a fad?
The Lifestyles of Health and Sustainability annual survey estimates that 13-19% of American adults are dedicated green buyers – a $290bn market. The US-based Cone Communications estimates that 70% of American consumers consider the environmental impact of their purchasing. The UK and Europe show similar numbers.
According to marketing experts, however, these figures are wildly overstated, reflecting attitudes, not buying patterns.
“Buying green products presents people with a social dilemma: they have to be willing to pay premium prices – not for their own direct benefit, but for the greater good,” says professor Shruti Gupta of Penn State University, a world expert in ethical behaviour. “While people love to voice their idealism to survey companies, the cold facts are they almost always put their self-interest first.”
Take Elizabeth Romanaux, a consultant from New Jersey interviewed by the American Association of Retired People for a magazine piece about green buying. She considers herself environmentally conscious. She recycles. She composts. But she won’t pay a premium for an eco-friendly hotel room or cleaning products. “It isn’t that I can’t afford them,” she told AARP Magazine. “It just goes against my grain to pay more.”
“Consumers will buy pricier green products,” Gupta says, “but only if they are convinced that the sacrifice – higher prices – signals some measurable value.”
We need proof that a green product or service is “as effective and of the same quality” as alternatives, says Kate James of Grail Research, a consumer research company. Grail reports that although 85% of US consumers claim they buy green, fewer than 8% actually do. According to marketing firm Ypartnership, although eight in 10 vacation travellers consider themselves “eco-conscious,” only one in 10 books travel based on green considerations.
Eco-consumerism remains a marginal purchase or luxury indulgence except for a dedicated few. A 2008 study funded by the UK Economic and Social Research Council found that 30% of consumers reported they were very concerned about environmental issues but they struggled to translate this into purchases. As a result, the market share for “ethical foods”, one of the most visible segments of the green market, has yet to crack 5%.
Baby boomers, who launched the green movement, are now the leading sceptics. Many have metaphorically traded in their Beetles for luxury hybrid BMWs, but deceive themselves they are still buying green.
Crowd Science, which uses internet surveys, says 25% of seniors say shopping green “makes no difference”; most of the rest are indifferent. To eco-cynics green consumerism is the ultimate oxymoron, akin to “corporate responsibility”. The genuine solution, of course, is to buy less – by significantly reducing consumption of goods and resources.
Three years ago, as green fever was peaking in Hollywood – green was declared the new black – Vanity Fair published its annual “Go Green” issue timed to Earth Day. Muckraked.com estimated that the issue, printed on non-recycled paper, used 2,247 tonnes of trees and produced 4,331,757 pounds of greenhouse gases, 13,413,922 gallons of wastewater and 1,744,060 pounds of solid waste. Vanity Fair scrapped the green theme issue in 2009.
The green marketing trend is certainly not all smoke and mirrors. The boom in environmental marketing has meant more scrutiny of companies looking to differentiate themselves. No longer limited to ecolabels and recycled packaging, green marketers have been forced to raise their game in transparent and creative ways, focusing on eco-innovation and actual corporate responsibility commitments to enhance their brand identity. They need to document their green credentials.
Perhaps the most encouraging twist is not the fragile green buying trend but the turn by manufacturers towards a more sustainable style of business – thank you, Wal-Mart and GE. “I believe the real growth in environmental consumerism will be in the business-to-business space, not in selling to consumers,” says Gupta. “For them it’s not paying premium prices, it’s making investments in sustainable production that significantly lowers long-range costs. Greening the supply chain saves them money.”
Jon Entine is director of ESG MediaMetrics and senior fellow at the Center for Health and Risk Communication at George Mason University.