As the global awareness about climate change increases, a growing number of companies and individuals are looking for ways to reduce their carbon footprint, either through investment in carbon credits or by means of purchasing low-carbon products. Businesses are picking up on this trend and are already using carbon footprint reduction as a way to build “green reputation” among consumers. But while at present this is a more or less voluntary brand strategy, a new study from the Carbon Trust reveals that carbon offsetting might become a non-optional alternative for companies willing to take advantage of the spending power of young adult consumers, and particularly those in emerging economies.
In the beginning of April 2012, the Carbon Trust, a UK-based non-profit group announced the results of a new study aimed at finding out the extent to which tomorrow’s consumers are concerned about climate change and will for that reason favour brands which invest in carbon offsetting. The research questioned over 2,500 young adults aged 18-25, in Brazil China, South Africa, South Korea, the UK and the USA on their awareness about carbon footprint reduction and its impact on their perceptions of brands and companies.
The study results show that young adult consumer awareness is the strongest in China, where 83 percent of the questioned individuals responded that they would be more loyal to a brand if it was reducing its carbon footprint and moreover, 60 percent of the Chinese young adults who took part in the research stated that they would stop buying a product if the manufacturer did not commit to carbon footprint reduction. 81 percent of the questioned Brazilian young adults on the other hand said that companies should be obliged to provide a proof for their carbon footprint reduction policy.
The research indicates that there will be growing future demand for new low carbon products, considering that both Brazil and China are major emerging economies and for that reason their spending power is likely to grow. This means that companies willing to sell products and services on those markets will have to incorporate carbon offsetting practices into their manufacturing processes and, most probably, use third-party verification standards to prove that to consumers. In addition, across all markets, on average a third of the young adult consumers have responded that they are prepared to purchase a product which is more expensive, provided that it has a lower carbon footprint.
As for the product categories which can do most to reduce their carbon footprint, according to young consumers, electronics take the first place, followed by healthcare brands and then clothes retailers and manufacturers. In the context of these results, it is no wonder that the Swedish fashion clothing company H&M has decided to launch new eco-conscious range with clothes made from more sustainable materials. On 12 April 2012, BusinessGreen reported that H&M was planning to use only sustainable cotton by the end of the decade, as part of an effort to reduce the environmental impact of its supply chain. In addition, in 2012 the company will introduce clothes labelled with climate-smart care instructions.
Those recently announced initiatives are part of the H&M’s business concept, as the company releases annual Conscious Actions Sustainability Reports, covering the H&M’s progress in making its products and operations more sustainable. As noted on the company’s website, the H&M’s customers are increasingly showing an interest in sustainability, which has prompted the company to add a sustainability value to its products. Given the results of the Carbon Trust research, the H&M measures and corporate sustainability values are likely to appeal particularly to their young adult customers.
Consumers have always been a powerful force and as such have a strong impact on markets and companies. And considering the increasing environmental awareness among young adults, investing in carbon footprint reduction may become a must for businesses and companies willing to attract the consumers of tomorrow.