Climate, Climate change, For Consumers, Policy

Consumers increasingly turning to companies to act on climate change

Despite international pressure mounting on world governments to take significant action on climate change, new research indicates global consumers are losing faith in sufficient governmental responses and instead pinning their hopes on the commercial sector, writes Gavin Dennett.

Australian strategic research and consulting agency Fifth Dimension has released the results of its worldwide research into sustainability and what actions consumers want taken to addressing the climate crisis – and the results don’t fare well for governments.

The study was conducted across Australia, the UK and US, and its key findings are that consumers are increasingly giving up on governments to do the right thing for the planet, instead shifting their focus to corporate organisations to lead the way globally. The study also found that consumers believe the private sector has a moral obligation to act on climate change.

Companies to lead the way

“We know consumers are concerned about climate change,” says Fifth Dimension founder and CEO Lyndall Spooner. “The argument has moved on from whether or not climate change is real to what is the world going to do about it.

“The overwhelming majority of consumers in Australia, the UK and US believe companies have a moral obligation to lead the way on sustainability because corporations are viewed as more likely to have a positive impact on climate change than their own governments.

“What is viewed by many people as the continued failure of governments to act on climate change now sees consumers putting their hope in the commercial sector, where they believe there is a greater desire to act quickly.

“Sustainability is now a global social force that cannot be ignored. At the end of 2021, consumers have galvanised their sustainability mindset and are using the power of their buying behaviours and decisions to force corporations to drive the large-scale change they cannot achieve as individuals.

“However, they require transparency and facts of actions taken to give them confidence of where to place their loyalty.

“Almost half of all consumers say they do not have a good understanding of what it means for a brand to be sustainable. As such, consumers would like companies to be required to report on their environmental impact to help them make better decisions on which companies to support.”

The Fifth Dimension research found that while a majority of study participants believe companies will largely prioritise self-interest above an obligation to society, they believe companies that have moved early to implement an ethical supply chain have done it for the right reasons – to be authentically sustainable.

“It is clear that companies which genuinely take positive steps to address climate change now will be rewarded, morally and commercially,” says Spooner.

“While scepticism often plagues companies that promote their charitable and community driven activities, consumers are asking companies to declare their views on climate change and to educate them on how their actions are making a difference.”

A moral obligation for companies to act

Based on the Fifth Dimension research, Australians are the strongest believers that companies have a moral obligation to become sustainable, with 70 per cent of participants responding this way compared to 60 per cent of US citizens.

“While there is always going to be scepticism around the motivations of companies to prioritise their self-interests over the greater good, one in two people – 48 per cent – believe companies that are currently moving to act on climate change and implement things such as ethical supply chains are doing it for authentic and benevolent reasons,” says Spooner.

“Based on our research, we believe the early movers are more likely to gain a preference and differentiation in the market for being authentic in communicating around sustainability.

“The majority of consumers, 60 per cent, also believe they would be better off if all companies were required to report their environmental impact – 64 per cent of Australians are of this view, which is slightly higher than in the UK, 61 per cent, and the US, 56 per cent.

“The challenge is what standards can be put in place to ensure consistent reporting of how sustainable a company is and how the claims can be validated.”

Distrust in government action

The research results overwhelmingly show that consumers in Australia, the UK and US are losing hope in government action being the way forward to address climate change.

“Our research shows that 71 per cent of consumers across Australia, UK and the US agree the world needs to act on climate change,” says Spooner.

“But when it comes to acting, one in every two people – 54 per cent – believe it will be companies that will have a greater positive impact on climate change than governments.

“In fact, only one in three people – 37 per cent – believe it is up to governments, and not companies, to determine how we should respond to climate change.

“Also, the belief that governments should take a leadership role on climate change steadily declines with age, as only 31 per cent of baby boomers [from the study results] put their faith in the government, compared to 43 per cent of Gen Z.”

With younger generations leading the discourse towards governments when it comes to perceived climate change inaction, this should signal alarm bells at all levels of bureaucracy, says Spooner.

“What we are seeing here is that younger people are saying governments are key to acting on climate change, however as they get older their faith in government to be effective decreases and they turn to the private sector to counter ineffective governments,” she says.

“Will people around the world continue to lose faith in governments to act on the greatest moral challenges of our time? Will we see greater reliance placed on the private sector to step up and take over the role of governments? Climate change will certainly be a litmus test for governments to put citizens before self-interests.”

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