NBS Report: Socially Conscious Consumerism
Consumers have unrealized power to influence their consumption choices. Experts discuss how to steer consumers towards responsible choices.
In November, 2008, experts from management, academia, and government convened to address socially conscious consumerism. Each group thinks about this topic differently. In dialogue sessions, participants shared ideas, debated issues, and ultimately advanced their thinking on the topic.
Access the summary report for full details on the forum outcomes. Continue reading to access speaker slides and highlights from the forum.
The Problem with Marketing
Misrepresentation is one of the worst business practices with respect to socially conscious consumerism. It includes misleading advertising (such as showing a large SUV next to images of nature and "green" slogans), and unsupported or over-extended claims (claiming a product is ecologically-friendly when it contains only slightly fewer chemical additives than competing products).
Concerned consumers who investigate the legitimacy of these claims may become discouraged and skeptical, slowing the momentum for socially conscious consumerism and putting at risk the firm’s reputation.
Challenges and Opportunities for Companies
Labeling and identifying socially responsible offerings is a challenge for firms. Many consumers want more socially responsible options, but lack the time, ability or motivation to become informed. Companies that create solutions to this unmet consumer need stand to reap the benefits.
How consumers will respond to company-initiated changes is also uncertain. Is it better to "green" an existing product or to create a new "green" brand? Research has shown the market rewards sustainability initiatives in companies with high quality products. As such, products can sell at a premium.
Challenges and Opportunities for Government
Some argue corporate investment in sustainability must be rewarded by government to encourage it. Others argue government regulation is not the answer; industry leaders should take the initiative to form associations and standards, with voluntary compliance.
But government can play a role in consumer education through social marketing campaigns. Consumers do adjust to new policies regulating behaviour, such as by-laws banning plastic bags or synthetic pesticides. And, governments can offer incentives to companies and industries who adopt and improve socially responsible practices.
Challenges and Opportunities for Consumers
Consumers have unrealized power to influence their consumption choices. If they were aware of their carbon footprint, would they make better decisions?
While individuals should be accountable for consumption decisions, educating oneself about responsible alternatives is not straightforward. Labelling is confusing. Differentiating between good and bad alternatives requires an unaccustomed degree of engagement. An overwhelming number of "eco-friendly" or "ethically produced" labels result in nothing but alphabet soup – a recipe for consumer confusion. Better indicators and metrics are required to help consumers identify options and make choices.
Yet, with increasing awareness of global social concerns, consumers have an opportunity to embrace a new philosophy of consumption. This change in mind-set and lifestyle involves a focus on sustainable choices and socially conscious behaviour, with the hope of improving physical, mental, and financial well-being.
The Bigger Challenges
How do we define "socially responsible" in terms of business practice and consumer behaviour? Can consumption even ever be good for the environment, as William McDonough and Michael Braungart have advocated for years?
Countless surveys have shown that consumers claim to take social and environmental attributes into account when making purchase decisions. But it is not clear if and when they are willing to act on such decisions. Educating children about the importance of making socially conscious choices may be the best way to instil change.
Highlights from Forum Sessions
A Systematic Review on Socially Conscious Consumerism
Dr. June Cotte, Associate Professor at the Ivey Business School, and Dr. Remi Trudel
Their own research shows consumers are not willing to pay much more for ethical goods, but consumers pay a lot less for goods that are not ethically produced.
Socially Conscious Consumerism: A Tautology?
Dr. Ron Dembo, Founder and CEO, ZeroFootprint
Socially conscious consuming is about consuming less, more ingeniously.
Make the invisible visible: the energy we use, the carbon we emit needs to be made visible to create changes in behaviour.
The seriousness of global warming has not yet been realized. Canada is behind.
Good (is Not) Enough: Stakeholder Reactions to Corporate Responsibility
Dr. C.B. Bhattacharya, Boston University School of Management
Consumers who are aware of a firm’s sustainability initiatives have higher intentions to purchase from them.
When people believe sustainability initiatives are genuine, they are more likely to purchase from, work for, and invest in the company.
The financial return on sustainability is greater in firms with high product quality or innovation than in firms without.
Can we shop and market our way to sustainability?
Dr. Peggy Cunningham, Dalhousie University’s Faculty of Management
The dominant paradigm of marketing is to create dissatisfaction among consumers so they buy more and keep the economy growing.
Consumers are just half of the equation. We need also to address the elephant in the room that is pushing for unsustainable consumption: unsustainable marketing.
We need to question our discipline; we need to rethink how we teach marketing.
RONA’s Green Strategy: A Holistic Life-Cycle Approach
Mark Hindman, Vice-President of Marketing and Olympic Programs, RONA Inc.
Collaborate with stakeholders at every stage of the supply chain when developing green products.
A holistic “life-cycle approach” considers each phase of production and disposal.
Third-party verification adds credibility to green products and helps avoid the danger of “green washing."