As climate change moves up the political agenda, consumers are beginning to push corporations to address the effect they have on the environment, says a March 2008 strategy paper published by consulting firm McKinsey. Meanwhile, corporations are responding to consumers’ needs by providing better products and company benefits, it says.
McKinsey bases its conclusions on a survey of over 2,500 business executives and 7,500 consumers in eight countries carried out in September 2007. The results show the environment will be the major sociopolitical issue to attract most attention from the public and politicians over the next five years.
The consultants believe taking steps to act against the negative effects of climate change is crucial to closing the ‘trust gap’ between consumers and corporations. However, there is still a big gap between what corporate executives and consumers think is being done to tackle the issues, the paper argues.
Both executives and consumers agree that the publicity climate change has recently received has added to its importance for companies, the survey reveals. The solutions to overcome the problems should be dealt with by corporations, governments and consumers alike, it continues.
While confronting climate change is important, consumers want businesses to focus on many other issues including healthier and safer products, pension benefits and health care benefits, according to McKinsey. On the other hand, executives find privacy, data security and overseas job losses the main causes for concern, claim the consultants.
The survey shows consumers believe corporations have a negative impact on society due to pollution and the harm they do to ecosystems. This is why corporations cannot ignore the environment as they look to improve their reputations, McKinsey argues. Therefore, it observes, companies must decide what role environmental issues should play in their business strategies.
A majority of the consumers surveyed said they would be willing to recycle and revert to energy-efficient appliances, thereby boosting the markets for these products.
Consumers are particularly unhappy with petroleum companies, indicating they should be sincere in investing more in renewable and alternative energy sources. As for the food and beverage industry, consumers want improved health and safety, environmental and ethical standards for business, according to the survey. The business sector with the highest trust rating among consumers is the high-tech industry, it reveals.
The study concludes that if businesses were to examine consumer needs at a very local level, they might be able to gain a competitive advantage as well as address global environmental problems.