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Marketing is uniquely placed to shape consumer behaviour on the demand side of business.
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Many marketing departments are currently not central enough to organizations’ sustainability aims and programmes.
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Equipping marketing with the tools and information to innovate will play a key part in reaching net zero.
Last November, COP27 ended in Sharm el-Sheikh, Egypt, with a historic agreement on a “loss and damage” fund for developing countries most impacted by climate change; however, the deal failed to include tougher commitments to limit global warming to 1.5°C.
What should now be clear to us all, if it was not already, is that if we are to have any chance of hitting the targets needed to stop the worst-case scenarios of climate change, systemic change is required beyond what governments can regulate or negotiate on their own; we must all act, and all act now.
The IPCC’s 6th assessment report indicated the huge potential for demand-side strategies, specifically highlighting choice architecture as a method of nudging consumers to make certain decisions, to lead to reductions in global greenhouse gas emissions (GHGs). These mitigation strategies were grouped into three intersecting domains: socio-cultural norms, infrastructure and end-user adoption.
While these demand-side actions are inextricably linked to supply-side decarbonization, multiple studies have shown that with innovative technologies and policies and behavioural change, these strategies can play an enormous role in helping us achieve our 1.5°C target to the tune of an estimated 40-70% reduction in global GHGs.
The crisis is not simply a problem at the margins, nor is it affecting those traditionally thought of as most vulnerable. It has shown that provision structures are broken – a rethink is needed and it is important that everyone has a role to play in that – including consumers alongside government, business and others.
The case for a consumer centric approach is ever more important now for two reasons. One, consumers increasingly want to be active agents of change in the energy, food and broader climate crisis. Our research on solutions to the cost-of-living and climate crisis found 78% of our members calling for sustainable food production and 68% for energy.
Two, leaders now recognise how important consumer action is in meeting the climate crisis. For example, the latest Intergovernmental Panel on Climate Change report showed that demand-side changes could reduce greenhouse gases by up to 70% in 20 years’ time.
We must grasp the window of opportunity we have to build with and for consumers. By doing so we can meet both the cost-of-living crisis and build a sustainable and inclusive marketplace. To explain this we can look at the concrete ways consumers can be brought into energy and food systems solutions.
Food systems that work for all
Between this July and September we brought together key players from across business, local and national government, consumer groups and civil society in Kenya, Indonesia and Ecuador to explore how we can build better food systems at home and to share lessons for others elsewhere. In particular, we found an overdependence on cheap food imports has flooded many national markets, forcing out local producers. This creates an unsustainable market, volatility when global prices rise and a lack of healthy choice for consumers. Consumers are now heavily paying the price – literally and figuratively – for the market dominance of suddenly insecure imported crops.
The solutions need to focus on short- and longer-term measures – inclusive of the consumer voice. This means emergency support for the vulnerable but also addressing systemic supply chain issues with countries adopting (and where need be) being supported to adopt more diverse, sustainable and local agriculture. It also means developing inclusive governance frameworks – hearing the voice of the consumer and a diversity of other voices in the discussion.
This is not the kind of immediate response that many governments are reaching for, but in the long term it will do far more to empower consumers, help local farmers, meet climate goals and long-term stability. Too often those who wish to delay such progress conflate scare tactics on price with consumer rights. But our research shows that protecting consumers and their rights is actually an essential part of any just transition and will save consumers money.
Consumer-led just energy transition
The reality of the energy crisis has meant consumers either going without essential heat or cooling are taking risks to keep their head above water. Around 81% of our members shared that consumers in their countries are adjusting budgets to pay for energy. The crisis is also causing a major shift in the energy world – previously unlikely governments such as India are now making commitments towards clean and secure energy systems to help meet both economic and climate goals.
Whilst this shift is encouraging we must not forget to put people at the centre of energy transitions – supporting them to deliver change at the pace and scale required to avert both the climate and energy price crises. This means government and business adopting measures which make it easy for people to take the low-carbon option.
For example, heat pumps could provide a simple, important change that would be safer, cheaper and more sustainable for those living in cooler climates and which could save consumers up to 31% on their fuel bills compared to conventional heating. A win-win for consumers and the planet. But not nearly enough information is currently being provided to customers about them, preventing a barrier to their adoption.
Our latest research calls for concrete measures to empower consumers in clean energy transitions. Not only do we call for better information to consumers on the low-carbon options but the marketplace needs to provide affordable, available and safe options. Barriers need to be removed so consumers know where to invest and how to install new systems and emerging technologies to create sustainable homes for example. Finally effective repair and redress will be the bedrock to consumer confidence in the options available.
Authored By:
Anna Lungley, Chief Sustainability Officer, International Markets, Dentsu
This article first appeared on the World Economic Forum Agenda and is republished under the Creative Commons Licence
