Consumers Are Willing To Pay for Sustainability – Are Businesses Doing Their Part?

News like this has become so common that you may have missed a headline from the Associated Press on July 24: “Monday breaks the record for the hottest day ever on Earth.” As reported in one of our Top Stories below, the European climate service Copernicus said the global average surface air temperature on Monday, July 22 was the hottest day on Earth in Copernicus’ data dating back to 1940. Scientists attribute the warming trend to human actions, with the director of Copernicus, Carlo Buontempo, saying, “The climate is generally warming up as a consequence of the increase in greenhouse gases.”

Consumers are increasingly affected by extreme weather events and flooding from rising tides, and as a result want to take action to combat climate change. In another of our Top Stories, PwC’s 2024 Voice of the Consumer Survey found that “85% of consumers are experiencing first-hand the disruptive effects of climate change in their daily lives and are prioritizing consumption that integrates sustainability-focused practices.” In addition, the survey found that 80% of consumers say they are willing to pay a premium of 9.7% more on average for goods that meet specific environmental criteria.

While consumer action is helpful, climate experts say the actions of businesses are far more important in reducing carbon emissions to meet the ambitious targets set by the Paris Agreement in 2016 (45% reduction by 2030 from 2010 levels and net zero by 2050). At a webinar hosted recently by the University of Colorado Denver, discussed in another of our Top Stories, Robert Hobbins of the UC Denver Business School said, “Businesses must step up to the plate and lead the charge in sustainability, not just for the planet’s sake but for the sake of their future.”

The UC Denver webinar, “Empowering Businesses to Make the Climate Transition,” discussed sustainability strategies for businesses and also highlighted the vital role that government policies had on improving sustainability. Global businesses are facing increased pressure from new government regulations to mandate sustainability reporting and climate actions, including the European Union’s CSRD and proposed new mandates from the U.S. Securities and Exchange Commission.

A recent Forbes article by contributor Gary Drenik, another of our Top Stories, discusses the need for companies to provide accurate data on carbon emissions and product carbon footprints to drive sustainable business decisions and help consumers make more informed decisions. He quotes Tim Weiss, CEO and co-founder of carbon management software company Optera, as saying that companies need to focus more on Scope 3 emissions, the emissions generated by the entire value chain, which can account for 70% of a company’s total carbon footprint.

Drenik cites efforts by the retail industry to improve direct product-use emissions data, in which the Retail Industry Leaders Association (RILA) partnered with Optera to create a database which combines information from suppliers and the EPA to provide standardized product emissions data. The data, which is currently at the product category level, is intended to help retailers take accountability for these emissions and provide consumers with more environmentally friendly choices.

With consumers pushing for more sustainable products, businesses will need to adapt to meet that demand, including by improving their sustainability reporting. G&A’s team continues to monitor trends in climate reporting including measuring Scope 3 emissions and is available to help guide companies on this important part of your sustainability journey.

This is just the introduction of G&A's Sustainability Highlights newsletter this week. Click here to view the full issue.