Creating Value from Sustainable Products: Insights from Deloitte Canada

Deloitte Canada’s inaugural Canadian consumer sustainability report, released January 22, 2024, delves into how businesses can create genuine value through sustainable products while fostering consumer trust in a marketplace saturated with environmental claims.

Key Findings

Strong Consumer Demand for Green Products

Despite economic challenges post-pandemic and inflation-driven impacts on discretionary spending, Canadian consumers are increasingly prioritizing sustainability. Notably, 62% of Canadians express willingness to pay a premium of 20% or more for sustainably produced goods and services. This trend underscores a growing consumer commitment to support environmentally responsible brands.

Information Gaps Fuel Consumer Skepticism

Amid the surge of sustainability claims—ranging from eco-labels to green marketing—consumers face confusion and doubt about the authenticity of these assertions. The report highlights a significant disconnect: while brands often believe their sustainable products are well-perceived, 49% of consumers remain skeptical about the legitimacy of sustainability messaging. This skepticism is exacerbated by widespread greenwashing, where companies make misleading claims, leading to reputational damage.

The Cost and Complexity of Sustainable Product Launches

Introducing sustainable products frequently involves higher costs and complexities, with benefits that are not always immediately measurable. Companies must be prepared for these challenges and integrate sustainability as a core aspect of their operations and strategy rather than as an add-on.

Purpose-Driven Products Win Consumer Loyalty

The research emphasizes that successful sustainable products stem from a clear business purpose that resonates with consumers. Purpose aligns production, marketing, and corporate responsibility efforts, creating authentic products that appeal to conscious buyers.

Necessity of a Whole-of-Enterprise Approach

Adopting sustainability requires comprehensive integration across the entire organization—from supply chains and production to sales and communications. This "all-inclusive" strategy ensures consistency and credibility in sustainability efforts, enhancing consumer trust.

Building Consumer Trust Through Transparency

The cornerstone for companies to earn and sustain consumer trust in sustainability is authentic messaging and transparent practices. Brands are encouraged to openly share credible information about their environmental impacts, certifications, and product lifecycle to engage consumers meaningfully.

Takeaways for Retailers and Brands

• Prioritize authenticity over superficial green claims to avoid consumer skepticism and potential backlash.
• Invest in transparency to educate consumers and build long-term trust.
• Embrace sustainability as a purpose-driven strategy rather than a trend or compliance measure.
• Address the true costs and benefits of sustainable products openly within the organization.
• Align all departments and processes in a holistic approach to sustainability, ensuring consistency.

Conclusion

The Deloitte report underscores a clear opportunity for Canadian businesses to lead in sustainable consumer products by genuinely embedding purpose and transparent practices into their operations. With consumers willing to invest more in sustainable options, companies that build trust through authenticity will unlock lasting value in the conscious consumption market.

Source

Deloitte Canada, Creating Value from Sustainable Products (January 22, 2024)

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