Consumer Sustainability Is Getting Hot

2014 was the hottest year. Thankfully there is something else getting hot, consumer sustainability.

Sustainability itself is hot. Corporate sustainability keeps gaining momentum because of pressure from investors and shareholders. Global warming awareness and activist pressures motivates politicians in industrialized and developing democracies to pass laws that favor sustainability. The all powerful Chinese Communist party is also increasingly contributing to sustainability.

The sustainable community movement is also growing.

All these trends are welcome and necessary.

At Earth Accounting we propose that consumers should be able to make a necessary contribution with their purchasing decisions. After all, these purchases represent 60% of the global economy (70% in the US). In past posts we highlighted studies that concluded that from 15% to 65% of all consumers would rather buy a more sustainable product, even if the price is higher. A more recent study looks at consumers from the other side of the issue;

Sustainable future: 43% of Americans refuse to buy eco-unfriendly products

In the end of 2014, the U.S-based marketing consultancy Tiller in collaboration with the online polling company Pollara Strategic Insights surveyed 1,005 Americans aged 18+ across 50 states to learn how their “green state of mind” had changed. Around 83% of the respondents agreed that in 2015 they would adopt a more environmentally responsible lifestyle; about 60% vowed to make “green resolutions” this year (a 7% increase since 2009, 11%+ since 2007).
People are skeptical about corporate “green efforts.” While 78% of the respondents agree that businesses must be sustainable and environmentally responsible, just 21% believe that environmental concerns are the main reason for companies to adopt sustainable practices. 78% consider that it is important to buy from a socially and environmentally responsible company, while 43% have refused to buy a product over the past year if they had concern about its impact on the environment.
So, consumers are not just buying more sustainable products, they are also not buying products they believe are bad for the environment.
So where do consumers get their information to decide what to buy when they consider sustainability?

One source are eco-labels, there are more than 450 different ones;

This recent study sheds more light in what sources of information consumers trust;

Trust Goes Social: Global Study Finds Peers, Consumer Reviews Now Rival Certifications As Top Sources of Trust on Product Sustainability Claims

According to a study by BBMG, GlobeScan and SustainAbility, social sources of trust like consumer reviews, blogs and message boards (28%) as well as friends, family and co-workers (27%) now rival traditional sources like certifications (40%) and media reports (31%) as consumers’ most trusted sources for determining whether a product is socially and environmentally responsible. Barely one in ten consumers relies on company advertisements or website content for information, showing that the most trusted sources are often beyond a company’s control.
Two new startups, Open Label and Consmr aim to become the social media and Yelp for product oriented sustainability.
There is another way to do this. Wouldn’t it be useful if consumers could scan a barcode (or enter a product name or an SKU) and get information about the environmental and social impact of a product? If you agree do continue reading.

There are 4 approaches to accomplish this delivery of product info about sustainability.

1. Government mandate

This is the French approach with the Grenelle II legislation. The government requires manufacturers to disclose product sustainability information. Keep in mind that 97% of publicly traded corporations do not disclose such information. They do disclose their “sustainability strategies” nut no information. Based on our research, this effort, which may work in France but possibly not in the US, is perhaps stalled. Let us know if your sources say otherwise. But “vive la France”!

2. Scientific testing

Two other apps use this method, GoodGuide and HowGood. GoodGuide is owned by Underwriters Laboratories (UL). The idea is to test a product in a lab as UL has been doing since the late 1800 and give it a rating. This method makes sense and is welcome.

3. Requiring suppliers to deliver the information

This is the approach taken by WalMart’s Sustainability Consortium (SC). WalMart can do this because of their leverage with suppliers. (BTW UL is a key member of SC). The SC has announced their intend to deliver an app to give consumers a sustainability rating based on the data they require its members to deliver. Their method calls for a product life cycle assessment. The SC has been working on this approach since its formation in 2009.

4. An information cooperative

This is our approach. There are vast amounts of product sustainability information. Ecolabels are one source. Other sources of information include government agencies (EPA, NASA, etc.), environmental and social justice organizations, “green” manufacturers and even individuals. As an example we offer this recent news about a drone flying over a pig feedlot and processing plant.

To form a cooperative you need to specify in the bylaws how the revenue will be distributed among its members. We talked to 4 law firms and they all said that an information cooperative would simply have to come up with a formula to distribute its income depending on the information delivered by its members. We have filed for a patent that details the business process to do just that and we have several letters of intent by ecolabel organizations interested in joining the Alliance for Consumer Empowerment and Sustainability (ACES.coop). We plan to launch our app later this year. Our vision also includes user participation ranging from product rating to feedback by consumers to companies about their decisions and a Wikipedia type environment to make it as transparent as possible for consumers to see the sources of information.