As the cost of living takes over every part of our daily lives, will our purchases become less sustainable too?
In 2022, the green technology and sustainability market reached $46.5 billion and is expected to be worth $417 billion by 2030. This growth is partly thanks to NGOs such as the United Nations implementing rules and blueprints for global sustainable development and adoption. However, part of this increased interest has also been incentivized by consumers, by people like you and me. From recycling waste, using reusable water bottles and buying eco-friendly clothing, we are leaving our footprint in the acceleration of the sustainable industry.
However, despite this growth, sustainability is still not considered mainstream. Many resources need to be used, including time and money, to follow a sustainable lifestyle. This raises the question: is sustainability just a fleeting trend that will be forgotten when situations out of our control negatively impact us, or will it thrive regardless of the circumstances? That’s what we aim to find out.
The Rising Cost of Living in the UK
First of all, why are we being hit by this crisis?
The cost of living crisis we are currently experiencing has been caused by the price change of typical goods and services (e.g. energy, food and fuel) in the last 12 months. This shift is also known as inflation.
Various global factors have caused this price increase. From the pandemic to the war in Ukraine, there has been more demand for products and services that are not as readily available to us as they once were.
What other economic crises have taught us, including the 2008 recession, is that consumer behaviour naturally shifts when hit with financial hardships. Indeed, the Great Recession had the most severe decline in consumption since the second world war, and even if this crisis is not as severe, it will certainly still have repercussions.
But the real question is, will it also affect sustainable consumption?
Are Consumers Embracing Sustainability?
Before looking at whether sustainability will take a backseat this year, we have to find out how ingrained this type of purchasing is in consumer behaviour.
Gen Z Are Influencing Older Generations
A study by Business Wire revealed that around 85% of consumers worldwide have become greener shoppers in the past five years. From this percentage, it’s clear that younger generations are leading the way. Gen Z, followed by Millenials, are seeking out environmentally friendly alternatives due to their concern for the planet’s well-being.
Yet, younger consumers are not the only ones adopting this shift. In fact, it does seem that all generations, including Gen X and Baby Boomers, are willing to spend more on sustainable products, with an average of 10% to 25% more.
Also, let’s not forget that in less than a decade, Gen Z will represent almost a third of the world’s income and become leading deciders on what is being bought. Companies that have already taken a step in the sustainable direction will be in the safe zone since this age group supports businesses with their same values and goals. However, companies that have not yet stepped in this direction will have to do so shortly to stay relevant and prevent their failure.
Overall, it seems that the average consumer is taking steps to become more sustainable, or at least has the right mindset for it.
Intention and Action Are Two Very Different Words
The thought of buying sustainably makes us feel like we are helping the world heal from the damage we have caused. We are making things right, and that’s extremely rewarding. Unfortunately, the question that needs to be asked is: how often do we pursue this intention? And also, how large is the gap between desire and action?
One study has shown that even if most respondents were willing to live a sustainable lifestyle, only 13% were actively changing their behaviour to achieve that.
What makes this shift even harder is the difficulty to recognise whether a company is truly sustainable. Let me explain.
Unless we see a label with ‘made with recycled plastic’ or do our own research, it’s almost impossible to know whether a business is doing its part to be greener and more ethical. Also, even if some high street brands are taking steps to become more sustainable (e.g. creating a few garments with lyocell), should we also consider all the harm they are causing as a whole? And if we do, does that mean that if we buy a sustainable piece from them, we are ultimately still causing more harm than good?
To further highlight this point, 57% of consumers said they find it hard to tell if something is environmentally friendly, and over 60% would be more inclined to purchase a product if it had a clear certification.
Unfortunately, there isn’t a straightforward answer to where to buy. In most cases, the line separating sustainability from environmental and social degradation is blurred by transparency issues. Yes, online we would find a few businesses that are 100% committed to this practice, but how many are truly in tune with the average consumer’s needs, especially during an economic crisis?
Price vs Sustainability
If we look at certain eco and ethical products, the financial barriers to sustainable purchasing could be significant during the cost of living crisis.
Organic foods cost on average 47% more than their conventional equivalent, and sustainable fabrics are two to four times more expensive than other fabrics used by high street retailers. With these statistics, it’s no surprise that part of the population would stop buying sustainably during these tough economic times. It’s simply just not feasible.
Indeed, last year, almost half of Brits failed to consider environmental or ethical factors when changing to more affordable retailers. However, that doesn’t mean that environmental and social concerns are not in the minds of some shoppers, especially Gen Z.
Another point to raise is that sustainability doesn’t have to be necessarily associated with luxury and costly prices. Some environmental alternatives can be cost-effective. For instance, using LED light bulbs is both environmentally friendly and cheaper in the long run. Yes, the light bulb itself is more expensive than the traditional incandescent bulb, but it is also 5x cheaper to operate.
That’s not all. Consumers can make other sustainable choices without paying a premium. They can pick loose fruit and vegetables rather than pre-packaged items to avoid extra plastic and waste. There’s the option to reuse and recycle items (e.g. a shopping bag or water bottle) instead of buying single-used products. One could even purchase second-hand clothing instead of incentivizing fast fashion and causing environmental and social harm. All of these sustainable efforts, and many more, can be achieved without spending an extra penny.
Expenses, Savings and Personal Circumstances
What Are People Cutting Back on Most?
In the past year, consumers have begun cutting back on certain non-essential expenses.
There’s been a reduction in recreational activities and holiday bookings. This means that in 2023 (as during the pandemic), we will probably see more people staying at home and going on staycations.
Consumers are also spending less on takeaways and deliveries, preferring to cook at home to save up some money. As this shift happens, we will consequently see an increase in grocery shopping.
Thirdly, as opposed to the home renovation trend that boomed in the height of covid, this year will see a cutback on big-ticket items such as furniture as well as home improvements and remodelling.
Finally, other non-essential purchases like clothing and electronics won’t either take centre stage this year.
The Conscious Consumer
Not surprisingly, the planet-first mentality that rose two years ago during COP26 has now moved to second place, with affordability taking the lead. However, a sustainable mindset that will grow during the cost of living crisis will be of the conscious consumer. This is the idea of buying what you need instead of following trends attached to fast consumerism. It’ll be about repairing rather than replacing and saving instead of buying. Ultimately, if someone is consuming less, they are also spending less, making it both sustainable and affordable.
Inflation Will Hit Every Household Differently
Even if the cost of living crisis will affect purchasing behaviours, it’s also vital to consider personal expenses and financial circumstances. In fact, depending on different factors, someone might have to save up more or less this year.
For instance, do you rent, or do you have a mortgage? Do you drive your own car, or do you use public transport? Do you have kids or any pets? How much time do you spend at home every day (e.g. do you work from home)? Do you feel financially stable, or is your salary below average?
The number of expenses and financial circumstances will determine whether a consumer might look for the cheapest option when purchasing or still feel comfortable buying sustainable products (or maybe somewhere in between).
The High Cost of Living Will Impact Sustainable Purchases
Although people are becoming more sustainable (or are willing to be), we’ve seen that this practice is not yet fully integrated into our buying culture and habits. In fact, consumers want to buy sustainably, but they often don’t. And, even if we wouldn’t call it a fleeting trend, sustainability will most likely take a temporary back seat during the cost of living crisis.
Indeed, price will always come first in these financial situations. Consumers will happily include sustainable practices and purchases, but only if they’re also budget-friendly. Therefore, this year we might see more people buying second-hand, wasting less, reusing and recycling, buying energy-efficient items and repairing products rather than replacing them.
However, consumers are not the ones responsible for this sustainable shift and instead should be supported through these difficult times. Governments, organisations and businesses should help mitigate this impact by making it easier for consumers to access sustainable products, especially for those struggling to make ends meet. These institutions could also introduce consumer education campaigns to help promote sustainable purchasing by underlining the long-term benefits of eco-friendly products.
With climate change and the economic crisis negatively impacting our daily life, now more than ever, it’s indispensable to make sustainable products available and affordable for all.