Consumers more likely to change providers due to environmental reasons, survey shows

Photo by Polina Tankilevitch:

Consumers are more likely to change providers due to environmental reasons than customer service or product quality, according to a recent survey by GHD.

37% of consumers surveyed by the professional services company would change providers for a more environmentally friendly product/service, compared to 28% who would switch if they were offered products/services of a higher quality and 26% who would switch providers if they offered better customer service.

Tim Mawhood, Executive Director UK, Europe & Middle East, at GHD, commented on the survey’s findings: “It’s no secret that consumers are becoming increasingly environmentally conscious, but it’s remarkable to see that people would now prioritise a less environmentally damaging product over one of higher quality.

“This demonstrates how seriously consumers are taking the threat of climate change in their purchasing decisions – and therefore how seriously companies need to take their ESG policies in order to remain competitive.

“This is more important than ever following the introduction of mandatory TCFD-aligned requirements for Britain’s largest companies in April.

“This is especially true for the Energy and Retail sectors, where our survey shows consumers are most likely to switch providers as a result of companies not meeting their ESG targets.

“However, whilst our research shows that Energy organisations are among the most likely to meet their net zero targets, Retail companies are the least likely, highlighting that the sector could be at real risk of disruption if significant resource isn’t allocated to improving sustainability.

“Companies need to think about how sustainable every point on their supply chain is. Right now, the ability to understand and declare with confidence that your whole supply chain is net zero is an impossible task.

“Not only that, for many businesses having full control, transparency and sustainability of their supply chain is not currently a commercially viable model – but this will need to change.

“Ultimately, organisations need to evaluate their business models and fully embed ESG into operations to remain investible and be better prepared when disruption occurs.

“However, striking a balance between investment in ESG and profitability will be one of the biggest challenges for all sectors — from a societal and regulatory point of view, as well as a business standpoint.”

Two surveys were conducted among over 2002 consumers and 306 business leaders in the UK. The interviews were conducted online by Sapio Research in January 2022 using an email invitation and an online survey.

The survey formed part of the extensive research carried out to create GHD’s inaugural UK Disruption Index, which evaluates which UK industries have established resilience, and which are most at risk of being disrupted.

As part of this Index, the water sector was identified as the most resilient to future disruption, ahead of the Information & Communication industry in second place and Energy in third.

Further survey highlights include:

  • 59% of consumers would always look to buy from net zero companies, but only 25% would do so if it meant spending more.
  • In order to reduce their carbon footprint, over the next two years consumers are most likely to buy alternative everyday products or find an alternative energy provider, followed by finding alternatives to driving.
  • Nearly half of consumers (49%) would pay to reduce their personal carbon emissions by 50% if it cost less than £100 a year; 27% would pay more but 24% would not be willing to pay anything.

The full Disruption Index and accompanying whitepaper, “Recovery, Resilience and Reconnection: Designing business for an ever-present state of disruption”, can be found on the GHD website.