I don’t know about you but right now it feels to me like we’re struggling to make the progress we want as a human race. From a wave of social and environmental issues, to climate change, racism, gender inequality and unfortunately, war. All of these problems are limiting us from creating the kind of world we want to leave for following generations.
And I’m hardly alone in this view. The United Nations outlined 17 Sustainable Development Goals to help governments focus on making the changes that we all seek. Unfortunately, it’s clear that governments alone cannot (or will not) address these challenges quickly enough and it will take the concerted efforts of government, businesses and individuals to make a real difference. There is progress, even if it is not always easy to see. The good news is that businesses are now starting to drive change, prompted by the investment community’s pivot towards Corporate Social Responsibility (CSR) and ethical investment under the guidance of ESG frameworks.
Consumers are voting with their wallets
And in tandem consumers are speaking with their wallets, actively choosing brands that are aligned with their ethics. Glow’s own research reveals that 64% of consumers already take into account a brand’s social and environmental behaviour when making purchase decisions. These findings are mirrored in many recent studies that show the changing dynamics of consumer decision making, like this one from Nine Network and this one from a group of purpose driven agencies.
A willingness to pay more for sustainable products is also on the rise. This study found that amongst those who find CSR extremely important, 70% of respondents surveyed said they were willing to pay a premium for brands that are sustainable and environmentally responsible. And recent McKinsey analysis shows a 3.5% premium that consumers on average are willing to pay to access more sustainable products. Glow’s recent investigation into eco-friendly household goods purchasing showed that 1 in 2 Aussie & Brit consumers were willing to pay a little more for products that supported a more sustainable lifestyle.
Whilst there is always a gap between what consumers say and do, there is good evidence that consumers are increasingly trialling and switching brands to align with their values. Recent Glow research in this area found that over one in four consumers (27%) say they’ve started using a specific FMCG brand in the last twelve months based on the brand’s social or environmental behaviour. In contrast, more than one in five say they’ve stopped using one or more brands for the same reason. This switching behaviour can be seen across all sectors – whether it is grocery products, superannuation, utilities or fashion. It is just the magnitude that changes.
This data highlights that strong positive behaviour from brands is a magnet for the growing numbers of conscious consumers but also a significant risk for brands that no longer satisfy the rising tide of consumer expectations regarding CSR. This evolving mindset means that what consumers think of your Environmental, Social and Governance (ESG) footprint has never been more important. The cost of getting it wrong – on brand reputation, preference and sales – is significant and growing.
What issues do consumers really care about?
Glow’s Catalyst research program shines a light on the issues that businesses should focus on with their ESG programs, by providing an overview of the issues that matter most to consumers and insight into what consumers expect should be done in response. Whilst this is a helpful starting point it is just that; a macro view of concerns, current behaviour and potential solutions. It does not provide perspective on what consumers think of individual brands or guidance for how to improve your business’s standing with your customers.
In contrast, the majority of brand level data that exists in relation to ESG is focussed on:
- corporate data assessment of ESG readiness
- measuring adherence to agreed ESG frameworks
While these data assets are powerful ways to track the implementation of an ESG program, they make no consideration of consumer perspectives on whether the business is doing the right thing or communicating what they are doing effectively. This leaves a gap for trusted consumer feedback regarding how brands are perceived, because what consumers think is what drives their purchasing behaviour.
You can measure what consumers think
Currently, there’s a lack of tools and resources for understanding what customers think of a brand’s ongoing sustainability/CSR/ESG practices. This is why Glow has developed a unique metric that measures perceptions of a brand’s social and environmental responsibility over time. It’s called the Social Responsibility Score. The Social Responsibility Score (SRS) enables brands to assess how consumers perceive them relative to the competition, as well as diagnose ways to improve their standing in order to reduce churn and gain market share.
When it comes to measuring perceptions of your brand, this tool serves as a robust, actionable metric for understanding how to stay ahead of consumer expectation, and competitors. It provides C-suite, insights, corporate communications, sustainability and marketing teams with data to inform decisions around how they allocate and communicate their environmental and social responsibility investments.
How Social Responsibility Score captures reliable data
The SRS uses nationally representative consumer research to score individual brands based on their perceived social and environmental responsibility. Over the last 18 months, Glow has refined the methodology behind SRS using Australian and US data to validate the metric and prove its relationship to the following key measures:
- Willingness to pay a premium for a brand
- Revenue growth
Find out more about the methodology here. SRS comprises three data tracking products that combine robust measurement with standardised reporting and data visualisation to provide high value, low cost insights for brands. It enable brands to:
- Assess how their brand is perceived within their portfolio and competitive set
- Compare their SRS to industry benchmarks
- Understand what is driving perceptions of their social responsibility
- Compare selected portfolio or competitor brands against industry benchmarks and each other
These insights allow brands to better shape their ESG investments. If you are developing your ESG strategy, SRS can help to identify the most crucial areas that need investment, based on consumer expectation and appeal. If you already have a strategy, assessing your SRS will help you to optimise current investments by measuring perception of your existing programs so you can make adjustments as necessary.
Why act now?
You can’t build a socially responsible brand without having a clear understanding of what your employees, customers and prospects currently think of you, as well as understanding whether your current efforts are recognised.
The SRS bridges the divide between ESG actions and consumer perception to enable you to focus your efforts where they’ll have the most impact in the eyes of current and potential customers.
Interested in seeing the SRS for your brand? It only takes 2 minutes to request your free benchmark score here.
And if you’d like free access to ongoing social and environmental issues research then sign-up to the Catalyst newsletter here.
By Mike Johnston, Managing Director Data Products, Glow
SRS is a data product that uses Glow’s unique research platform to gather and present the data. Glow empowers a range of businesses – from advisory and consultancy firms to media agencies, market research agencies and consumer brands – to make better decisions through the use of agile consumer insights. Book an intro with one of our experts to see how Glow can help your business grow.