Firms risk losing talent to more environmentally sustainable peers amid changing consumer sentiment
Peerzada Abrar |
Last Updated at April 23, 2021 23:39 IST
The Covid-19 pandemic has elevated consumer focus on sustainability and willingness to pay out of their own pockets — or even take a pay cut — for a sustainable future, according to a new IBM Institute for Business Value (IBV) survey of over 14,000 consumers in nine countries.
Nine out of 10 consumers surveyed reported that Covid-19 has affected their views on environmental sustainability.
Covid-19 was the top factor cited in influencing their views — more than others, including widespread wildfires, bushfires, disasters due to weather events and news coverage on the topic.
The survey also revealed differences in consumer opinion across geographies, with Americans surveyed reporting the least concern for sustainability issues.
For example, only 51 per cent of US consumers surveyed said addressing climate change was extremely important to them, compared to 73 per cent of respondents from all other countries.
“The survey showed respondents worldwide are increasingly concerned about the global climate crisis. We have also observed that businesses in many industries are looking to take action to meet their customers’ and investors’ expectations and manage their own environmental goals,” said Murray Simpson, global lead for sustainability, climate & transition, IBM Global Business Services.
He added, “We see many companies beginning to make strides to build transparent supply chains or improve energy management to reduce carbon emissions with the help of innovative technologies like AI (artificial intelligence) and blockchain.”
Half of the consumers surveyed globally agreed that climate change exposure of a company impacts an investor’s financial risk.
At 70 per cent, Indian consumers have the highest levels of association of climate risk with financial risk.
According to the survey, many consumers are increasingly willing to change how they shop, travel, choose an employer or even where they make personal investments based on environmental sustainability factors.
About 71 per cent of employees and employment seekers surveyed said environmentally-sustainable companies are more attractive employers.
As a result, more than two-thirds of the workforce respondents are more likely to apply for and accept jobs with environmentally and socially responsible organisations. And, nearly half the surveyed would accept a lower salary to work for such organisations.
Nearly 85 per cent Indian respondents consider environmentally-sustainable companies as more attractive employers.
At the same time, 48 per cent of consumers surveyed trust corporate commitments on sustainability, with 64 per cent of the respondents expecting increased public scrutiny in the year ahead.
Given that one in four employees surveyed in February 2021 plan to switch employers this year, companies could face a risk of losing top talent to more sustainability-conscious competitors.
Forty-eight per cent of all personal investors surveyed already take environmental sustainability into account in their investment portfolios and a further fifth (21 per cent) surveyed say they are likely to do so in the future.
About 59 per cent of personal investors surveyed expect to buy or sell holdings in the next one year based on environmental-sustainability factors.
Many surveyed shoppers and travellers are willing to pay more for environmental sustainability. Despite the Covid-19 pandemic’s financial impact on many individuals, 54 per cent of consumers surveyed are willing to pay a premium for brands that are sustainable and environmentally responsible.
Consumers in India (63 per cent) research on personal health and wellbeing benefits of products before purchase.
In addition, 55 per cent of consumers surveyed report that sustainability is very important to them when choosing a brand — 22 per cent higher than consumers surveyed pre-Covid-19. Slightly more than six in 10 consumers surveyed said they are willing to change their purchasing behaviour to help reduce the negative impact on the environment, with consumers surveyed in India (78 per cent) and China (70 per cent) being the most willing.
With regard to travel, almost one in three respondents strongly believe their personal travel habits contribute to climate change. About 82 per cent of consumers surveyed globally would choose a more environmentally-friendly transportation option even if it costs more. But only 64 per cent of American respondents agreed on this compared to 95 per cent of Indian (the highest) and 91 per cent of Chinese respondents.
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