The potential for electric vehicles might be brighter than some people believe, if a recent consumer survey on environmentally sustainable products is an indication.
Eight out of 10 Americans say they prefer purchasing environmentally friendly brands, and two out of three say they are willing to pay more for them, according to new research from PDI Technologies Inc., an Alpharetta, Georgia-based technology company delivering software solutions and consumer insights to the convenience-store and fuel-stations industries. PDI owns GasBuddy.
Young adults, often referred as Gen Z, are more environmentally conscious than other cohorts, with 91% of Gen Z preferring to purchase from environmentally friendly brands, compared with 80% of Millennials and 85% of parents, according to PDI’s third Business of Sustainability Index. Directions Research conducted the survey online from March 30 to March 31 from a demographically diverse sample of 1,038 U.S. adults 18 and older.
The survey indicated an upward trend in environmental consciousness over a three-year period, said Trenton Spindler, vice president of sustainability, operations and innovation at PDI Technologies.
“It’s a great opportunity for us to take advantage of a growing change in consumers’ buying behavior,” Spindler said. “It’s our opinion companies can drive value and a return on investment from sustainable initiatives and from communicating them clearly.”
Electric-vehicle charging is one way to deliver the environmental sustainability a growing number of consumers say they want. “It’s an awesome opportunity. We’re just so well put to take advantage of it. It’s really the convenience industry’s sweet spot. We just need to run with it,” Spindler said.
Gen Z Goes Green
A growing interest in green fuel emerged in the survey. About 64% of Americans said they would be willing to pay more at the pump if carbon emissions were offset with environment efforts, such as planting trees. About 76% of Gen Z consumers and 74% of parents would pay more for fuels with an environmental component, compared with 67% of Millennials.
“We do believe EVs have a little more time before they become adopted. Because of that we believe convenience can lead in this energy transition and into EV,” Spindler said.
Younger adults are more open to paying a premium for sustainable products than older respondents. About 77% of Gen Z, or those ages 18 to 26, say they would pay more, for sustainability compared to 72% of Millennials, or those ages 27 to 42. Three-fourths of parents surveyed also expressed a willingness to pay more for sustainable products. The age of the parents surveyed wasn’t disclosed.
Yet consumers say they often can’t tell how environmentally friendly a product is. “We think Americans are not understanding products. They don’t know if the product is sustainable and they don’t know if the company is,” Spindler said.
Clamoring for Clear Labels
About 79% of consumers want an easier way to identify environmentally friendly companies, such as clearer language on packages, the survey suggests.
This indicates people care about the products they buy and their environmental impact, Spindler said. They also are interested in the companies that make and sell the products, he said. Brands should measure and communicate their progress to differentiate their gains in sustainability.
About 45% of consumers say American corporations are doing a poor job at reducing the carbon footprint, the survey suggested. This percentage represents an increase from 41% a year ago, PDI said.
“Consumers want sustainability but struggle to find it. Even when they do, they often don’t trust the environmental claims companies make,” said Brandon Logsdon, president of consumer engagement at PDI Technologies. “Leveraging internal tools and third-party accreditation to help measure, track and communicate progress will continue to differentiate the sustainability gains of their products, services and overall enterprises.”
Companies also need to improve their communications, Spindler said. “We need companies to do a little bit more, but also to communicate what they’re doing,” Spindler said. “There’s a lot of good that companies are doing that they’re not talking about.”
As consumers become more aware of a company’s environmental practices, the scores are likely to improve, he said.
Companies should prepare for the energy transition by establishing a strong foundation with consumers today, Spindler said. “It ties into our thoughts about EVs. There is a bridge to a future in how we meet those consumers. Things are going to change. Industries are going to be adopted,” Spindler said. “We want to meet those consumers and build loyalty with them.”
By understanding the business case for sustainability, Logsdon said, “companies will be well positioned to gain market share and grow faster than their competitors.”