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  • Writer's pictureDavid Connolly

Consumers Expect Brands to Address Climate Change

As government leaders pursue policies and programs to mitigate climate change, businesses are also considering their role in environmental and sustainability issues—and that responsibility takes on greater prominence this year, with Deloitte research showing that, when it comes to activism, 2020 was a tipping point for society and business.

In the wake of the COVID-19 pandemic, 40% of the general public say they are more likely to be actively involved in social issues, and many are changing their buying patterns or encouraging others to do the same, according to the “#GetOutInFront” global research report, which examined consumer views in six different countries. To produce the report, Deloitte surveyed nearly 10,000 respondents during January 2020, then followed up with a second survey in May to gauge how opinions had shifted since the crisis began.

As the world enters an age of growing activism, the research shows that consumers expect businesses to step up, especially when it comes to issues of climate change and the environment. To adapt to the growing demand for action, organizations can work harder to anticipate shifts in public opinion. By identifying and responding to such shifts, C-suite leaders can make their organizations more resilient to risk. What’s more, executives can build consumer loyalty and drive revenue growth by aligning their actions to stakeholder values.

An Age of Activism

Over the last few years, the public has demonstrated that it cares passionately about environmental as well as social and cultural issues—and that it will not settle for the status quo. On average, 38% of survey respondents have “actively engaged” within the last 12 months—signing a petition, attending a protest, or donating and campaigning for a cause. Major shifts have contributed to this groundswell of activism, including the growth of social media, which has empowered individuals to find common cause with others, and the rise of millennial and Gen Z consumers, who rank climate change and protecting the environment as their top concern.

Highlights from Deloitte’s #GetOutInFront research show just how much consumers care about issues like sustainability—and why that matters to business.

Consumers are passionate about the environment. Asked to rate how they feel about a long list of societal concerns, 64% of consumers list recycling and reusing among their top three concerns. Another 64% list reducing single-use plastics in the top three, and 62% feel strongly about tackling air pollution. When Deloitte compared responses across countries, reducing carbon emissions was a near-universal priority.

Certain environmental issues, in particular, are growing in importance. For example, 64% of consumers say they care more about extreme weather patterns than they did the prior year. Meanwhile, 74% of consumers say extreme weather will become even more important in the future.

Activism correlates to brand loyalty and revenue. Deloitte’s research shows a clear opportunity for companies that take action on environmental issues. In fact, 23% of consumers say they will switch to buying products from an organization that shares their values on environmental issues, 42% have changed consumption habits themselves because of their stance on the environment, and 21% have encouraged others to switch to a company whose values align with their opinion on an issue.

Younger generations, in particular, are using their brand choices, spending, and personal energy to advance their beliefs. Consumers ages 18 to 24 years old are three times more likely to switch brands based on values than those 65 years old and above.

Managing Risk, Reputation, and Resilience

As consumers become more engaged, they expect the same of businesses. In fact, a majority (65%) of respondents expect CEOs to do more to make progress on societal issues, including reducing carbon emissions, tackling air pollution, and making business supply chains more sustainable.

So, what can businesses do to show that they’re taking this responsibility seriously? More than half (58%) of survey respondents want organizations to change their practices, and 55% want brands to create awareness around problems such as climate change. Another 41% would like companies to take a stand by donating to a nonprofit.

Deloitte’s research reinforces the need for businesses to carefully consider a range of social issues. Businesses can heed the public’s cry for activism by pursuing the following strategies:

Prioritize reputational resilience. Preserving and protecting reputation should be a key organizational objective. This can require companies to accurately sense the public mood on major issues—and to pivot quickly if need be.

Lean on corporate affairs. Leaders can rely on the corporate affairs function to detect and act on changing public sentiment. In partnership with marketing, corporate affairs can help turn environmental, social, and governance reporting into more consumer-friendly storytelling.

Incorporate social issues into brand strategy. To calculate the long-term viability for a market or product, brands can go beyond consumer sentiment to consider social sentiment as well. Increasingly, people expect companies to prioritize the needs of all stakeholders—including a business’s customers, employees, and suppliers, as well as the communities in which it operates.

Don’t underestimate the value of action. Deloitte’s research shows that reputation is driven by performance, behavior, and communication—yet behavior is most important. C-suite leaders can focus their efforts on credible, authentic actions that address consumer values.

by Mark Hutcheon, director, Deloitte North and South Europe; Sid Maharaj, former partner, Deloitte Asia Pacific; Keri Calagna, principal, Deloitte Risk & Financial Advisory, Deloitte & Touche LLP; and Marcus Plattner, partner, Deloitte Central Europe

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