The Next Economy
Attitudes v. Behaviors, $75B Worth of Plastic Damage Hot Topics on #SB14sd Day One

Monday, day one of SB ’14 San Diego, was jam-packed with thought-provoking workshops featuring dozens of experts sharing their latest research and insights on a variety of topics — from multi-sector anti-deforestation efforts to intrapreneurship to context-based sustainability.

The day was dominated by a two-part, day-long session featuring market insights from top researchers. In part one, researchers from Shelton Group, GlobeScan, BBMG, Cone Communications and more shared their latest findings on customer attitudes and behavior, many of which not surprisingly still examined the stubborn gap between the two.

Shelton Group’s VP of Research, Lee Ann Head, kicked off the morning with the results of the Group’s EcoPulse 2014 study, which they jokingly refer to as “The Curse of the Improving Economy” (working title). This year’s survey of 2,000+ people found that while web searches for more sustainable products is up to 70 percent from 65 percent last year, responsible product purchasing behaviors in various product categories are actually down 5 percent or unchanged from 2013. Another somewhat disconcerting finding was that conservation behaviors are down 5-9 percent; Head attributed this to the unstable economy, which may be creating ‘conservation fatigue’ in many consumers.

Her advice to brands: Tap into people’s lower-level needs (what people care about), desires and social drivers; price products near or at parity; and most importantly, remove the trade-off commonly associated with making better product choices (more expensive, harder to find, etc) — Head asserted that this will be a key driver in marking these behaviors more widespread.

Next, Continuum’s Kristin Heist delved into the needs and desires of Gen Y and their power to compel brands to do things better: Overall, they make less money than previous generations but are looking to achieve the same quality lifestyle; they’re attracted by authenticity and transparency from brands and are prepared to invest more in quality products or long-term solutions. Combined with their social and technological connectivity, Heist said Gen Y is uniquely positioned to give companies permission — rather, an imperative — to do things differently.

Her advice to brands: Don’t try to sell them “sustainability” — sell them quality, authenticity, experiences, stories, the ability to be part of something … and let them call it whatever they want.

GlobeScan’s Eric Whan continued the thread with the company’s latest data on Aspirationals, a highly influential consumer segment that represents more than one-third of shoppers globally (38 percent), defined by their love of shopping (93 percent), desire for responsible consumption (95 percent) and their trust in brands to act in the best interest of society (50 percent).

From the audience, Avery Dennison’s Helen Sahi pointed out ‘the elephant in the room’ — aspirationals are still buying too much stuff, even if that stuff is ‘better.’ In response, Raphael Bemporad from BBMG, co-author of the Aspirationals research (also in the audience), said that although they’ve demonstrated they want to do things differently, they still don’t know how — which he said was an opportunity for brands to step up and make it possible for them.

The comments were a great lead-in to Marci Zaroff’s presentation on the first-ever Fashion Revolution Day on April 24. Zaroff said the global campaign to overhaul the labor practices in the textile industry saw an amazing amount of engagement, media and social media buzz, and spurred events across Europe, Latin America and Africa.

Sahi astutely asked, how do they know if the level of interest in the campaign is actually affecting people’s purchasing behavior/decisions? Zaroff responded that if all shoes and apparel sported a Higg Index, it would spur continued awareness and conversation — yet another call for brands to make headway in this direction and reiterating Zaroff’s assertion that “transparency is the new black.”

Next, “green marketing” guru Jacquie Ottman talked about WeHateToWaste.com, the online community of waste-haters that she launched in 2013, chock full of tips, case studies and insights for and from those looking to live a waste-free lifestyle. Ottman stressed that the value in the site goes beyond tips and advice — it doubles as a valuable resource for brands, packaging suppliers, entrepreneurs and others who can use these insights to help increasingly discriminating consumers get their money’s worth from the products they buy.

Next, Anne Fajon from Cone Communications outlined findings from their report on the “Changing Grocery Aisle.” Consumers still prioritize taste first and foremost when buying food, but safety and nutritional value are next most important factors in purchasing decisions. And while 67 percent say they will pay more and sacrifice variety to purchase local food, their family’s needs trump their commitment to sustainable food options.

GoodGuide co-founder Dara O'Rourke recounted the origins of the service, the impetus for which was a light bulb moment he had several years ago while putting sunscreen on his daughter’s face (what’s really in this stuff?). To really drive the change that all of the brands and researchers in the room are striving for? O’Rourke said it would require combined consumer interest in better products with retailers such as Target — which in October announced it would use GoodGuide’s UL Transparency Platform to collect data from vendors of thousands of household and personal care products and evaluate them against the Target Sustainable Product Standard — that have the influence to help drive the needle.

In the afternoon, the conversation shifted away from consumers to market conditions, incentives, ROI and risk management.

Tim Greiner, Managing Director of Pure Strategies, shared findings from the firm’s recently released report, The Path to Product Sustainability, based on quantitative surveys of 100 global consumer product companies involved in product sustainability and qualitative interviews with heads, directors, and managers of sustainability at leading companies such as Coca-Cola, Timberland, Seagate, RB and Henkel. Greiner distilled the findings into four key points:

• 97 percent of performing companies have product sustainability goals
• companies need to focus efforts for effectiveness — no organization can do it all
• 85 percent of respondents picked supplier engagement as top place to invest for product sustainability innovation
• 90 percent of top performers are increasing the integration of sustainability into product development in the next two years

Next Ellen MacArthur Foundation CEO Jamie Butterworth explored the circular economy as an economic opportunity, examined case studies using the model (Mobile service provider take-back/refurbish/reuse programs for cell phones, Ecovative’s mushroom packaging) and detailed what businesses need to do to switch to the model.

Andrew Russell of the Plastic Disclosure Project (PDP) shared two main highlights from PDP’s groundbreaking joint report with Trucost, which calculated the natural capital valuation of the plastic 100 brands are putting into our environment:

• $75B = the natural capital cost of plastic in consumer goods sector per year, including the impact to oceans
• Levels of disclosure around plastic fairly poor — less than ½ reported relevant quantitative data (“surprising considering the amount of rhetoric we’ve had” already this week around transparency, he said)

On an even more encouraging note, Russell posited that there are many areas where science hasn’t caught up with us; he thinks our footprint is much higher than these figures convey.

Other highlights included:

• the top three areas of most impact from plastic (Asia being #1, then Africa, Latin/Central America)
• The sectors creating the biggest impacts: Food (23 percent), soft drinks (12 percent), household goods (10), auto (9) and furniture (9).

PDP and Trucost will offer a sneak preview webinar for the brands studied on June 19 before they fully release the report at the UNEP Environment Assembly in Nairobi on June 23.

Though most of the momentum in this area, as evidenced by the morning’s conversations, centers around efforts to get consumers to live more sustainably, BSR is focusing more on what to do as a business and why. The organization’s Business Case Builder — a joint project with Futerra with input from the Sustainable Lifestyles Frontier Group, which includes brands such as Carlsberg, Disney, eBay, Johnson & Johnson, L'Oréal, Mars and Mondelez — is an online tool launched in November featuring 50 case studies (26 public) examining the ‘what’ and ‘why.’ In keeping with the growing pool of research discussed throughout the day, takeaways to date include: Success requires holistic perspectives and internal partnerships; and the type of action matters more than the type of issue.