Environmental issues are increasingly carrying more weight with consumers, but brands and businesses may not be aware of just how much influence the issue has on brand loyalty. Globally, more than a quarter of consumers (28 percent) believe the majority of businesses they purchase from are not doing enough to combat climate change, according to new research from data transformation firm Exasol—and 85 percent of consumers have changed their mind about purchasing something from a company because they felt it did not do enough about climate change.
The firm’s newly released People, Planet, Data: Why Climate Change Action and CSR Have to be Data Driven study indicates that climate inaction is now a huge risk to business. In fact, 54 percent of CSR decision makers believe that if their companies fail to act on this, their business will no longer exist in 10 years.
Consumers demand action
Over four in five (86 percent) consumers cite a company’s credentials in climate change, diversity and inclusion, and ethical business practices as a key factor in whether they buy from or do business with organizations. In fact, almost 9 in 10 (88 percent) consumers say ethical and sustainable business practices are a key factor. What’s more, as many as two thirds of consumers (66 percent) reveal they would stop buying from a business that did not have credentials in these areas or plans to work on them in the next three years.
A roadmap for change
The challenge for businesses is that only two fifths (42 percent) have a fully formed roadmap in place to ensure more climate friendly business practices are put into place in the next 36 months. And three in 10 (31 percent) of those with no strategy at all had no plans to change this in the next 12 months. It’s time to reshape the conversation, and the actions taken.
Eighty-two percent of CSR decision makers agree they could make better decisions around climate change, diversity and inclusion practices, and ethical and sustainable business practices if they had access to data-led insights that informed these decisions.
“At Exasol, we believe in the power of data and using this to build a community that has a positive impact on our planet, from people and resources to policy,” said Peter Jackson, Chief Data & Analytics Officer at Exasol, in a news release. “Companies, and importantly their senior leaders, have a central role to play in this. As such, it is critical that they educate themselves on, and invest in, digital tools that can help them democratize data. This will empower them to give ‘green teams’—comprised of the CDO, data scientists and individuals from every business unit—access to the insights needed to evidence the value of CSR initiatives. With this insight, they can affect real change.”
Jackson continued, “Taking these steps now is essential. We have an undeniable responsibility to do all that we can to save our planet for future generations, while also protecting our stakeholders’ interests. We have the data, we have the resources, and now we have the opportunity to make a difference.”
What proof do consumers demand?
Consumers are also no longer comfortable with just taking the word of companies that they have previously purchased from. In fact, around two thirds of consumers (68 percent) reveal they will consider demanding data-backed evidence from organizations to prove they are making positive contributions in climate change, diversity and inclusion, and ethical and sustainable business practices in the next 36 months.
The sources of data consumers say they would trust most, in relation to a company’s position on climate change, include government-driven benchmarks, which show how the organization they want to do business with measures up against competitors (41 percent). This is followed by industry-driven benchmarks, which show how the company stacks up against competitors (35 percent). Interestingly, consumers also reveal that they will trust videos from well-known climate change activists mentioning businesses in a positive light (33 percent).
Exasol commissioned Sapio Research to survey the attitudes of 8,056 consumers and 716 employees, who undertake Corporate Social Responsibility (CSR), ESG, D&I programs, in the US, UK, Germany, China, South Africa, and Australia. With a view to understanding the impact of data-led decision making in D&I, climate change, and sustainable business practices.