Consumer expectations and business profitability key drivers behind sustainability efforts new study find

• Consumer companies underprioritizing the integration of policymakers and consumers into their ecosystems that drive sustainability efforts
• 45% of respondents accelerating collaboration with competitors
• Just 6% of respondents deemed it critical to actively work with policymakers to enhance collaboration in the next 3-5 years

Consumer businesses around the world are missing an opportunity to drive a sustainable future and create value by not adequately integrating the needs of consumers and policymakers, according to new research from Economist Impact, supported by the EY organization in a paper entitled: Progress and Profit: how consumer companies will scale sustainability through collaboration.

The study, which recorded the views of 400 consumer and retail-facing company senior executives, indicates that consumer and retail companies have a significant opportunity to shape consumer behavior through their unique position of trust. The study reveals that consumer trends and expectations are the most influential factors currently driving sustainability strategies with 88% of responding business leaders stating the need to respond to consumer and market trends as “highly significant” or “very highly significant”. However, only 32% of respondents state they have an optimized sustainability-related collaboration with their consumers and community. 

Companies are therefore missing an opportunity to integrate consumers into their ecosystems to help them achieve their sustainability strategies. Nearly two-thirds of respondents (62%) state they are collaborating to educate consumers, but this is still a significant gap for many, given substantial emissions and associated product waste can come at the point of consumption and disposal.

Engaging with policymakers

Responding consumer business leaders state regulation has unintended consequences, as almost two-thirds of respondents said stringent regulation was a significant barrier to sustainable collaboration. However, the study finds only 6% prioritize capacity to help shape the standards and legislation related to sustainability. More than three-quarters (80%) of respondents said government regulations and industry standards are driving sustainability, revealing the high influence that regulation has in shaping sustainability strategies, but only 6% see joining forces and actively working with policymakers as a critical factor to drive future progress. This missed opportunity for closer corporate involvement on specific scenarios where sustainability efforts could be better embedded puts companies at a disadvantage in a landscape where regulation is expected to accelerate in coming years, especially when governments can provide much of the infrastructure, incentives and governance for positive sustainable impact.  

Collaboration with policymakers to drive sustainability across regions was also found to be considerably low: Asia-Pacific (8%), Europe (5%) and North America (2%). These figures reveal that business leaders may need to improve their integration with policymakers to set and meet the given expectations.

Collaboration is key

The findings show there is a strong appetite for companies to collaborate when facing challenges to implement their sustainability measures. The majority (85%) of respondents said they are looking to work more closely with partners to create common sustainability strategies and almost half (45%) said that collaboration with their competitors is accelerating; however, 29% revealed their collaborations were not yet optimized. Results show that although companies do already collaborate on sustainability, to deliver initiatives at scale, there is room to expand partnerships. But this is challenging, as 68% of respondents highlight a lack of clear targets as a key obstacle in measuring collaborative progress.

The report indicates consumer companies recognize sustainability as an opportunity to drive growth, create cost efficiencies and build trust with their stakeholders, but sustainability collaborations must have a clear business case to be appealing (87% of respondents said business profitability is a lead driver of sustainability activities). With business motives a significant driving force set to continue over the next three to five years (34% consumer companies see themselves as value-led and 33% as reputation-led in their approach toward sustainability) social and environmental concerns were seen as less influential than market expectations and brand value.  

Kristina Rogers, EY Global Consumer Leader, says:

“It is clear companies don’t want to go it alone to achieve their sustainability goals. This crucial research by the Economist Impact identifies how collaboration and bolder vision from leadership can help companies have their cake and eat it too, by marrying their sustainability ambitions to value-accretive and scalable projects that will bring collective benefits to their value chain and their wider ecosystem. Equally, sharing best practices and exploring circular synergies between different sectors is not just ‘the right thing to do,’ but will also help unlock real value for businesses, which can align with collectively defined standards of measurement or create profitable solutions from the by-products of their peers.”

Jim Doucette, EY-Parthenon Global Consumer Products and Retail Leader, says:

“When considering ecosystem collaboration, companies must clearly start with their own business and extend this to their supply chains, their partners, their peers, even their competitors. But they should not stop here. Instead, they should seek to integrate their sustainability strategy holistically within the markets where they operate by engaging with consumers, communities, governments and organizations. This will deliver the scale they need to drive improvement, and also deliver the value and growth that enables their business to thrive tomorrow.”

Martin Koehring, Economist Impact’s Senior Manager for Sustainability, Climate Change and Natural Resources, says:

“The twin challenges of scaling sustainability measures and maintaining stability across global operations have compelled consumer leaders to reassess resilience and sustainability — not only in their own organizations but also in their wider ecosystems. Our research identifies vital areas where ecosystem collaboration can help consumer companies scale sustainability initiatives, and thereby deliver value to both people and planet.” 

Discover the full report findings at: Progress and profit: How consumer companies will scale sustainability through collaboration

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About Economist Impact 

Economist Impact combines the rigour of a think-tank with the creativity of a media brand to engage a globally influential audience. We believe that evidence-based insights can open debate, broaden perspectives and catalyse progress. The services offered by Economist Impact previously existed within The Economist Group as separate entities, including EIU Thought Leadership, EIU Public Policy, EIU Health Policy, Economist Events and SignalNoise. 

We are building on a 75-year track record of analysis across 205 countries. Along with framework design, benchmarking, economic and social impact analysis, forecasting, and scenario modelling, we provide creative storytelling, events expertise, design-thinking solutions and market-leading media products, making Economist Impact uniquely positioned to deliver measurable outcomes to our clients. For more information please visit Economist Impact