Ncsbc 2008 Presentation Final

Has Consumer Demand
Reached the Tipping Point?

Fall 2008 Sustainable Business Forum
November 10, 2008

Session Description
News Flash: 110% of Consumers Shop Green! Many recent studies
have claimed that consumers want green products and are willing to
pay more for them. Is it true? Have we really reached a tipping
point?
While there are a bewildering number of claims and success stories,
what is the deeper underlying reality of consumer demand for green
products?

Do Consumer Actions Matter?

Consumers have direct or indirect control over more
than half of total emissions

So, Has Consumer Demand Really Reached the
Tipping Point?
I have the answer. And the answer is……

YES
NO
MAYBE
IT DEPENDS!

Yes
Overwhelming trend coming from every industry, country, sector
(business, government, NGO, personal)
Reinforced in popular culture
Increasing awareness of the need for change
Significant growth of green products and green industries
Reinforced through mass media (e.g. NBC Green Week)

Some Evidence
Almost three-quarters (72%) of U.S. adults believe their personal
actions are significant on the environment
• Women are much more likely than men (77% versus 67%) to believe
that their actions are significant.
− In fact over one-third (35%) of women believe their actions are very significant on
the environment compared to 21 percent of men who believe the same;

Republicans are less likely to say their personal actions on the
environment are significant (63% vs. 78% for Democrats and 77%
for Independents);
More than half of U.S. adults have made changes in their lives that
they believe will help sustain the environment

Concern for the environment continues to grow
worldwide, particularly in Latin America
More concerned compared to 5 years ago
Mexico 87%
Thailand 83%
Argentina 81%
Brazil 79%
Malaysia 74%
Italy 62%
Spain 61%
Singapore 58%
Japan 55%
Australia 54%
Korea 52%
USA 49%
UK 48%
Russia 44%
France
42%
Germany
38%
Hong Kong
33%

I am more concerned about the condition of the environment compared to 5 years ago – completely/pretty much agree.

No
Despite progress, most indicators of environment health are in a state of
decline
Time and time again, consumer interest seems swayed by the latest crisis
• Remember $5 gas?
• How about a Dow at 14,000?
48% of Americans are skeptic about global warming
17% believe their actions are not significant on the environment
• Progress: this is down from 21% last year
58% of Americans have not heard the phrase quot;environmental sustainabilityquot;
Adult Americans really have a very poor knowledge of the environment
• 32% pass a basic quiz on environmental subjects
• Just 12% pass a basic quiz on awareness of energy topics

Environmental Degradation - Worsening Faster!
Cause
Effect

Green vs. Green
quot;What would you say is more important to your region – protecting the
environment or economic growth and development?“
US Canada US Region
East Midwest South West
% % % % % %
Economic growth and
development 63 45 57 69 64 62

Protecting the environment 27 44 31 18 27 29
Not sure 10 11 12 13 8 9

May ‘06 June‘07 Nov‘07 June ‘08
US ONLY
% % % %
Economic growth and
development 54 48 51 63
Protecting the environment 34 43 37 27
Not sure 12 9 12 10

Maybe
Every Green segmentation scheme shows a range of commitment
Greens (in various shades) make up 40 – 60% of the population
Really simple syndication, from Joel Makower:
• Committed - knows what to do and does it
• Conflicted - knows what to do, but doesn't always bother
• Confused - doesn't know what to do, or how to make a difference
• Cynical - doesn't know and doesn't care

It Depends
Significant segment descriptors
• Category
− Luxury/premium products better able to command price premium than
commodities
• Age
− Just under half of Echo Boomers (those aged 18-31) and Gen Xers (those aged
32-43) have heard of sustainability used (46% and 47% respectively), while just
30% Matures (those aged 63 and older) have heard it used.
• Education
− Just under half of those with a high school education or less (46%) have changed
their lifestyle compared to two-thirds (65%) of those with a post graduate degree.
• Other variables
− Income
− Race
− Nationality

Gap Between Behavior at Home and Work
Nearly three-quarters (73 percent) of workers said they strongly or
somewhat agree that it is important to them that their employer is an
environmentally and socially responsible company.
But, what the workers themselves do at work vs. at home shows a
disconnect.
Economic motivators are more powerful than environmental concerns

WORK HOME
Turn off light 52% 92%

Turn off computer 34% 58%

Put PC in sleep mode 44% 57%

6 Key Dimensions and 20 Attributes
Measured in the Reputation Quotient SM

VI. Social I. Emotional
Responsibility Appeal
18. Supports Good Causes 1. Feel Good About
19. Environmental Responsibility 2. Admire and Respect
20. Community Responsibility 3. Trust

Reputation
V. Vision & II. Products &
Leadership Services
QuotientSM
15. Market Opportunities 4. High Quality
(RQ)
16. Excellent Leadership 5. Innovative
17. Clear Vision for the Future 6. Value for Money
7. Stands Behind
IV. Financial III. Workplace
Performance Environment
11. Outperforms Competitors 8. Rewards Employees Fairly
12. Record of Profitability 9. Good Place to Work
13. Low Risk Investment 10. Good Employees
14. Growth Prospects

How the RQ is Calculated
The RQ score is calculated by summing the ratings on the individual
RQ attributes then dividing by the total possible score and multiplying
by 100.

For example, if there were only 5 attributes:
• Trust the company a great deal 6
• Stands behind its products & services
7
• Develops innovative products & services 6
• Offer products & services that are good value for money
5
• A company with strong prospects for future growth 5
___
29
29 X 100 = 82.8 RQ
5x7

The highest possible RQ score is 100.

Corporate Social Responsibility –
What the public considers most essential
2004 2005 2006 2007
% % % %
Treatment of Employees/Human Rights 38 33 34 33

Personal health and safety 30 30 29 32

Treatment of environment (SR) 10 11 12 12

Involvement in local community (SR) 8 9 9 7

Responsible advertising 5 6 5 5

Charitable donations (SR) 1 2 2 2

• When asked what is MOST essential to them when evaluating a
company’s corporate social responsibility, most people say that the
company’s “treatment of [its] employees, including their labor
practices and human rights record” matter most (33%).
• The “personal health and safety associated with using the
company’s products and services” is a close second (selected as
most important by 32% of the General Public).
• Treatment of the Environment was significantly less important
(12%).

16

Harris Polls
Economic Growth or the Environment? When Cornered, Americans Believe
Economic Growth is More Important [July 30, 2008]
http://www.harrisinteractive.com/harris_poll/index.asp?PID=938
The Environment…Are We Doing All We Can? [June 19, 2008]
For Earth Day: Americans Think All Three Presidential Candidates would do
a Better Job Handling the Environment Than President Bush Has Done
[April 21, 2008]
For Earth Day: Two-thirds of Americans Believe Humans are Contributing to
Increased Temperatures [April 18, 2008]
Adults in Five Largest European Countries and the U.S. Supportive of
Renewable Energy, But Unwilling to Pay Much More for It [February 26,
2008]

Harris Polls
Global Warming Seen as a Problem That Needs to be Addressed Globally,
But Most People Want U.S. to Take the Lead [November 7, 2007]
Large Majorities See Organic Food as Safer, Better for the Environment
And Healthier — But Also More Expensive [October 8, 2007]
Three in Ten U.S. Adults Believe That The Federal Government Should
Have Most Environmental Responsibility for U.S. Food Industry [July 18,
2007]
One-Quarter Of Americans Do Not Recycle In Their Own Home [July 11,
2007]
U.S. Adults Less Likely Than Europeans to Think Humans Are Contributing
to the Increase in Global Temperatures [April 23, 2007]

Publicly Released Research About “Green” Issues
conducted by Harris Interactive
Survey of homeowners, conducted on behalf of Applied Materials, measured
current and future usage of solar power to generate electricity for the home. The
survey also examined barriers and incentives to usage of solar power, including
attitudes toward government incentives. [August 2006]
http://appliedmaterials.com/news/assets/solar_survey.pdf
General population survey, conducted on behalf of the Biotechnology Industry
Organization (BIO), determined consumer attitudes towards biofuels. [October
2006]
http://bio.org/ind/biofuel/survey.asp
Survey of car drivers, conducted on behalf of Pavilion Technologies, measured
consumer awareness of, and attitudes towards, biofuels. The survey also
determined barriers and incentives to biofuel usage. [December 2006]
http://www.pavtech.com/index.php?option=com_content&task=view&id=239&Itemid
=35
Survey of employed adults, conducted on behalf of Adecco USA, gauged
employees’ attitudes about working for a “green” company. [March 2007]
http://www.harrisinteractive.com/news/newsletters/clientnews/2007_Adecco.pdf
General population survey, conducted on behalf of Xantrex Technology, gauged
consumer interest in renewable back-up energy for their home. The survey included
back-end analysis by homeownership status. [April 2007]
http://www.xantrex.com/web/did/1693/readnews.asp

Survey of employed adults, conducted on behalf of 1E and the Alliance to Save
Energy (ASE), examined PC usage at work. The survey focused on reasons why
workers do or do not shut down their computer at the end of the workday. [May
2007]
http://www.kiplinger.com/businessresource/summary/archive/2007/Energy_1E_Allia
nce.html
Survey of employed adults, conducted on behalf of Sun Microsystems,
determined green behaviors at home versus at work. The survey also gauged
employees’ attitudes toward socially and environmentally responsible companies.
[June 2007]
http://www.sun.com/aboutsun/pr/2007-08/sunflash.20070801.1.xml
General population survey, conducted on behalf of the Clean Fuels Development
Coalition (CFDC), examined adults’ attitudes toward ethanol, specifically with
respect to national security, America’s reliance on foreign oil, and the impact of oil
and ethanol costs on food prices. [September 2007]
http://www.cleanfuelsdc.org/pubs/documents/HarrisPollRelease101507.pdf
General population survey, conducted on behalf of Arrow Electronics,
determined consumers’ knowledge and usage of various lighting options, specifically
LED or solid-state lighting. The survey also examined consumers’ preferred price
point for LED lighting, including incentives that would encourage them to pay a
premium. [October 2007]
http://findarticles.com/p/articles/mi_m0EIN/is_/ai_n25362028

Survey of Fortune 1000 executives, conducted on behalf of 1E, determined who at
their company is primarily responsible for corporate power consumption
management. [March 2008]
http://www.harrisinteractive.com/NEWS/newsletters/clientnews/2008_1E.pdf
Survey of employed adults, conducted on behalf of Adecco USA, gauged
employees’ attitudes about working for a “green” company (follow-up to 2007
survey). The survey also examined general population perceptions on
“greenwashing”. [March 2008]
http://www.reuters.com/article/pressRelease/idUS140783+17-Apr-
2008+PRN20080417
Survey of parents of children under 18, conducted on behalf of Stremicks
Heritage Foods, examined what foods, vitamins, and nutrients parents include in
their child’s diet, and determined knowledge about, and perceived importance of,
omega 3 DHA fatty acids. The survey included back-end analysis by parents of
children under 6. [March 2008]
http://www.reuters.com/article/pressRelease/idUS123722+21-Apr-
2008+PRN20080421

Survey of Fortune 1000 executives, conducted on behalf of Makovsky + Company,
examined executives’ attitudes about climate change from a personal as well as
professional perspective. The survey revealed substantial gaps between what
executives think their company should be doing to address climate change and the
actions that are currently being taken. The survey determined reasons why
corporations should act on climate change issues, as well as barriers to doing so.
Executives also assessed the role of various entities (individuals, governments,
corporations, NGOs) in bearing responsibility for climate change issues. [March
2008]
http://www.reuters.com/article/pressRelease/idUS120191+23-Sep-
2008+GNW20080923
General population survey, conducted on behalf of Farmland Dairies, examined
adults’ milk-drinking preferences, including attitudes about organic and skim milk in
particular. [April 2008]
http://tastecincinnati-food.blogspot.com/2008/06/organic-vs-hormone-free-dairy-
survey.html
General population survey, conducted on behalf of Trilogy by Shea Homes,
gauged consumers’ concern about the environmental legacy they will leave behind
for their grandchildren’s generation and their interest in reducing their carbon
footprint and making their home more “green”. Consumers were asked to rank the
benefits of a “green” home they would find most appealing and the features that
would be most important to them if they were planning to purchase one. The survey
also included back-end analysis by Baby Boomers. [May 2008]

General population survey, conducted on behalf of Trilogy by Shea Homes,
gauged consumers’ concern about the environmental legacy they will leave behind
for their grandchildren’s generation and their interest in reducing their carbon
footprint and making their home more “green”. Consumers were asked to rank the
benefits of a “green” home they would find most appealing and the features that
would be most important to them if they were planning to purchase one.
http://www.prnewswire.com/cgi-
bin/stories.pl?ACCT=ind_focus.story&STORY=/www/story/10-14-
2008/0004903346&EDATE=TUE+Oct+14+2008,+08:00+AM
General population survey, conducted on behalf of Whole Foods Markets,
examined consumer attitudes about, and purchasing habits of, natural and/or
organic foods. The survey focused specifically on the impact of the economy and
higher food prices on grocery shopping preferences and behaviors, and also
determined consumers’ likelihood to take advantage of tips, coupons, and money-
saving recipes. [August 2008]
http://media.wholefoodsmarket.com/pr/wf/national/8-26-08valuesurvey.aspx
Survey of laptop owners, conducted on behalf of Boston-Power, determined
length of ownership of laptop, satisfaction with the battery’s performance, and
frequency and method of replacement and disposal of laptop battery. The survey
also gauged the importance of various features and laptop owners’ willingness to
pay a premium for certain features, including a battery that is better for the
environment. [September 2008]
http://www.reuters.com/article/pressRelease/idUS139551+17-Sep-
2008+BW20080917

References
The Bridge at the End of the World: Capitalism, the Environment
and Crossing from Crisis to Sustainability, James Gustave Speth
National Environmental Education & Training Foundation
• www.neetf.org
Hartman Report on Sustainability
• http://hartman-group.com/products/reportSustainability2007.html
Joel Makower
• www.makower.com
TNS Green Life Study
• http://www.tns-us.com/greenlife/
American Environmental Values Survey
• http://ecoamerica.typepad.com/blog/2006/12/american_enviro.html

For More Information

Jim Jubelirer
President
Jubelirer Research and Consulting
(919) 969-7818
jim@jimjubelirer.com

Ncsbc 2008 Presentation Final

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