How to beat the consumer trust gap for a greener wallet and world

EY survey highlights lack of consumer trust and perceived affordability in sustainability as challenges to advancing sustainability success.

In brief

• Widespread adoption of green products and services has been slowed by a perceived lack of convenience and higher costs, which gives companies and consumers pause.
• A growing lack of trust in the US is causing consumers to seek proof of a company’s claimed “good deeds."
• Companies that demonstrate effort and progress in sustainability efforts can authentically win consumer confidence, which creates brand trust over time. 

Many US consumers are increasingly seeking to buy products and offerings that are sourced sustainably. In fact, a recent survey by Ernst & Young LLP (EY US) found that more than half of all consumers said they want to purchase goods and services from businesses that align with their own values. This sentiment tracked even higher among high-income (74%), millennial (65%) and Gen Z (58%) consumers.

On the surface this seems like an easy ask: understand what the consumer wants and find a way to deliver against it. But anyone who has spent time leading in retail or consumer products organizations — attempting to deliver against consumers’ elevated expectations — will tell you it is no easy task. EY research found two critical gaps causing a barrier between desire and action. The first is a struggle with perceived affordability on both the part of consumers and businesses, particularly the small to medium-sized businesses surveyed in this study. Second is a growing lack of trust in the US, with consumers seeking proof of a company’s claimed “good deeds.” While the business challenges are real, so are the potential risks of waiting until it is too late to act. Letting others lead and trying to catch up will cost far more. Additionally, there is opportunity in the gap. Businesses can gain competitive advantage by understanding consumers’ emerging and latent unmet needs and finding innovative ways to meet them.

While most businesses surveyed say they lack the resources needed to engage in a comprehensive effort to overcome the lack of trust, it is certainly possible to take steps to improve consumer understanding of businesses’ sustainability initiatives. This starts with a thorough understanding of where businesses are falling short with consumers. To help, EY US conducted a survey of 5,000 consumers and 400 businesses in summer 2022 to inform business leaders of how they can better meet consumer expectations. All the businesses surveyed were considered small to medium-sized and employed fewer than 1,500 employees, with nearly half employing fewer than 100 people and most in business between six and 15 years. The majority also reported selling a mix of virtual and physical products or services. 

Key takeaways from the survey include:

1. Given the perceived higher costs, buying sustainable products is viewed as a privilege for affluent consumers and the businesses that serve that market.
   
2. Moving beyond the industrial revolution will require tremendous effort, commitment and capital.
3. Reaching mass consumer adoption will be difficult without systemic shifts to reduce barriers to purchasing sustainable goods and services.

While many larger companies are already taking steps to provide more sustainable products to consumers, it’s now time for smaller businesses to take a more proactive role in engaging consumers with their brand and sustainability values.

Sustainable purchasing is a privilege

Cost remains a barrier to wider adoption of sustainable products for many consumers. While many say they feel personally responsible for making the world a more socially and environmentally sustainable place, their ability to act on that desire is limited to those with more means to pay.

Three-quarters, or 76%, of high-income consumers say they care about purchasing goods from businesses that align with their values. And 74% prefer to shop with companies that align with their values around environmental and social issues. And while still high, this number drops significantly when lower-income groups are included. Among lower-income consumers — those families earning less than $100,000 per year — 54% responded that they care about buying from businesses that fit with their values, while 53% of the same group make purchases based on sustainability considerations.

Trust also represents a barrier to sustainable purchasing. While the majority of affluent, urban and millennial consumers say they trust businesses to do what they say, companies face a significant gap in reaching both lower-income and rural consumers. While 68% of high-income respondents say they trust companies to keep their word, only 33% of lower-income consumers do. And 31% of rural consumers say they would not trust a company to keep its word. New strategies and tactics are required to reach these lower-income and rural consumers.

Individual contributions of one business or one consumer to overall sustainability goals might seem futile or relatively small, but collectively consumers and businesses, through their commitments, actions and the right partnerships, can make a huge difference in helping the US – and the world – lower overall climate impact and credibly fight climate change.