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Figures gleaned from the 2014 Barometer of Responsible Consumption published November 26 and detailing the level of Quebec consumer confidence in players active in the field of sustainable development are nothing short of alarming! (1) Indeed, they point to a sharp rise in consumer scepticism over the past 5 years. In 2010, a scant 33.8% of consumers expressed confidence in corporate commitment to sustainable development. By 2014, this percentage had dwindled to 14.9%, a drop of 18.9 points. The latest report reveals an almost identical trend respecting the level of consumer confidence in environmental goods and services advertising by business which shed 14.3 points over the same period, tumbling from 30.7% in 2010 to just 16.4% in 2014.
This scepticism notably translates into an important impediment to responsible consumption that researchers refer to as commercial use of the responsibly argument. Accordingly, 40.8% of respondents found certifications to be nothing more than marketing ploys intended to justify higher prices, while 40.3% considered ethical allegations to be brand arguments designed to boost profits.
As one might expect, scepticism proved considerably higher among consumers with less responsible consumption practices. The 2014 Barometer does, however, substantiate that responsible consumers comprise 15.2% of the consumer base in Quebec (Index of Responsible Consumption of 80.7 compared with the overall average of 65.1), a highly encouraging finding. Responsible consumption is no longer a niche market given that practices such as recycling, local product sourcing (especially food products) and use of reusable grocery bags are widespread among the population as a whole.
Nonetheless, the link between rising consumer scepticism respecting corporate commitment to sustainable development and various perceived impediments to responsible investment (RI) is noteworthy. In February 2014, a study by the ESG UQÀM Responsible Consumption Observatory, found that for 36.8% of consumers, businesses and financial institutions failed to provide sufficient proof of eco-responsible behaviour. (2) Worse yet, over a third of individuals surveyed indicated that businesses included in RI funds were not subject to a rigorous selection process based on socially responsible criteria. Hence 28.3% lacked confidence in the filters used to select businesses included in RI funds.
Even businesses that figure as leaders in terms of sustainable development have considerable work to do before they can proclaim to have adopted genuinely sustainable management practices.
What then can one offer in the way of advice to consumers seeking to engage responsible action and make a real difference? What can be done to inspire businesses to change their behaviour in the matter of sustainable development?
A recent international study, conducted with 300 executive heads of large corporations, pointed to customer demand as the primary driving factor behind businesses shifting their focus and demonstrating an interest in sustainable development (65.8%). (3) Responsible investor and social rating agency demand proved influential factors for 59.3% and 61.5% of businesses surveyed respectively. However, it is important to understand that not all RI are equal in prompting executives of the like to take action in terms of sustainable development. Indeed, engagement and best-in-class strategies tend to impact management practices more than exclusion strategies since businesses are not necessarily directly aware that they have been excluded.
In RI, just as in responsible consumption, the impact of a given strategy depends on the number of advocates of the strategy in question! And change rarely proves fast-paced. In fact, RI is not without challenges as a lever of corporate sustainable development. It is, however, a tool ripe with considerable potential!
This post by Brenda Plant originally appeared on the Ethiquette blog.
1 2014 Barometer of Responsible Consumption, ESG UQÀM Observatory of Responsible Consumption, http://consommationresponsable.ca/wp-content/uploads/2014/11/BCR_2014.pdf
2 Québecers and Socially Responsible Investment: Portrait for 2014, ESG UQÀM Observatory of Responsible Consumption, http://consommationresponsable.ca/wp-content/uploads/2014/02/Les_Québécois_et_lISR_portrait_2014-2.pdf
3 Oekom Research, 2013. Impact Study. http://www.oekom-research.com/homepage/english/oekom_Impact-Study_EN.pdf
