Consumers turning away from unethical companies
The trend towards more sustainable consumption continued in 2021, according to Intrum’s annual European Consumer Payment Report. As we mark World Environment Day, it seems businesses increasingly need to demonstrate their ethical credentials to thrive.
As 150 countries take part in World Environment Day on 5 June, the United Nations Environment programme is urging governments, organisations and individuals to make changes to help protect the planet.
During a year of extreme weather events, including devastating floods in Germany and wildfires in Greece, consumers are demanding stronger environmental performance from businesses – and say they will vote with their wallets if companies don’t live up to their values.
Businesses face late payment penalty
According to Intrum’s latest European Consumer Payment Report (ECPR), three in 10 respondents (29 per cent) say they would feel no guilt about paying a company later than agreed if they thought the company was unethical.
The figure rises to 42 per cent of Gen Z consumers, reflecting the extent to which this cohort – which is only just starting to exert its consumer power – is willing to take action around climate issues.
Businesses will need to pay attention if they want to retain the loyalty of these customers and protect their cash flow.
Pandemic enhances move to ethical spending
According to a September 2021 study of 27,000 people across the globe by OpenText, consumer demand for ethically sourced products has increased during the pandemic. Nine in ten (88%) said they prioritise buying from companies that have ethical sourcing strategies in place.
Intrum’s survey agreed. More than half of consumers (52 per cent) said they wouldn’t buy from a company that they knew to be responsible for harming the environment. This figure rises as to 68 per cent of consumers in Portugal, which vowed to step up efforts to address extreme weather events following severe wildfires, and to 62 per cent in Greece.
These feelings affect payment behaviour as well as product choice. Almost a third (29%) of consumers also said that if they thought a business was unethical they would feel no guilt about paying them later than agreed.
Those with children are more likely to refuse to buy from an unethical company – a third (33%) said this, compared with a quarter (26%) of households without children.
Consumers are also turning against waste:
- Nearly six in 10 (57%) are buying fewer items than they were before the pandemic, to live a simpler life.
- 58% say they eat more leftovers than they used to, instead of buying new food, to reduce their impact on the environment.
- 65% say they are increasingly fixing and recycling old items rather than buying new things.
The proportion living more simply rises to 61 per cent of women (compared to 52 per cent of men) and is also higher in Southern and Eastern Europe (65 per cent and 60 per cent respectively) than in wealthier Northern Europe (50 per cent), suggesting that economic considerations may also be driving this trend.
Despite sales surging during retail events such as Black Friday – our survey highlights a heightened consumer awareness around environmental issues such as landfills and discarded plastics. Consumers are increasingly becoming disillusioned with seasonal discounts due to the waste that is produced and businesses will need to keep up with this sentiment.
Ethical equals expensive
This is good news for the planet, however, cost is holding consumers back - 58% say they cannot live as sustainably as they would like to, as environmentally friendly products are expensive.
Download the full report
The insights from this article are based on the European Consumer Payment Report 2021. You can download the full report below.