Consumers demand sustainability from post-pandemic manufacturing

3 mins read

Consumers are actively seeking out more sustainable products and services and rewarding environmentally-friendly businesses in the wake of the coronavirus pandemic, a research report from E.ON reveals today.

The pandemic has caused a big shift in consumer behaviour, with seismic changes seen in the manufacturing industry. As more than a third (36%) of Brits say that they’re buying products from companies with strong environmental credentials, 70% of small and medium sized businesses (SMEs) in the manufacturing sector have noticed their customers care more about their green credentials than they did last year. Four in five (80%) say they are planning to purchase goods and services from businesses they know have made a concerted effort to be environmentally friendly.

E.ON research shows the manufacturing industry has seen significant pressure for change. Three quarters (75%) of small and medium sized businesses (SMEs) in the sector believe they would increase their appeal to customers if they improved their environmental credentials. As these changing behaviours are felt across all industries, knowing the commercial opportunities, over two thirds (67%) of businesses in the manufacturing industry this sector have named said improving their sustainability credentials is a top priority over the next 12 months. However, more than three quarters (78%) of them felt there wasn’t enough guidance on how to improve their environmental practices.

Based on surveys of small business owners and consumers across the UK, E.ON’s Renewable Returns report looks at the impact of the pandemic on consumer and business behaviour as well as the potential for a ‘green economic recovery’ and the ways in which small and medium-sized businesses can benefit from it.

The research confirms that Covid-19 has radically changed consumer purchasing habits and that concerns about the environment are becoming more important in persuading people what to buy – and who to buy it from. Of the consumers surveyed, 72% said they pay attention to whether a business acts in a climate-friendly way, and 65% feel it’s important the products or services they buy do not harm the environment.

Consumers are willing to pay a premium, too. The research shows more than a third (34%) of people have already knowingly paid more for ‘green’ products since the pandemic struck and more than half (51%) think the environmental credentials of a product or service are now just as important as the price they pay for it.

Commenting on the report, Michael Lewis, CEO of E.ON UK (pictured), said: “The coronavirus pandemic has heightened people’s concerns around the climate crisis and this has brought the environmental footprint of the products and services we buy into sharp focus. It is clear from our research that there is real opportunity for the manufacturing industry to embrace the green economic recovery and lead the charge in providing sustainable products.

“Small businesses are the engine of the British economy, and we can help make sure they’re equipped to take maximum advantage of the green economic recovery – providing the smart, personalised and sustainable solutions they need to be part of the new energy world. That means providing everything from 100% renewables-backed electricity at no extra cost for our direct customers, to smart meters and new technologies such as electric vehicle charging, solar panels and battery storage.”

On average, consumers reported they are willing to pay 3% more for goods that are sustainable. Based on the average yearly turnover of an SME in 2019 – which was £370,000 according to government figures – this increase could be worth as much as £11,100 a year to annual earnings.

The increase in demand for sustainable products was most noticeable in London, where more than half (52%) of consumers said they’d changed their habits in this way. The shift was also particularly noticeable among millennials (those now in their 20s and 30s), with over half (54%) saying they now buy more from green businesses – however, the research shows people of all ages are now seeking more sustainable products.

With regards to repeat business and referrals, more than three-quarters (78%) said they were more likely to recommend a business if they knew it made a sustained effort to be environmentally friendly.

E.ON has created the Renewable Returns report as a tool for SMEs seeking information on how to become more sustainable. The report provides a one-stop-shop for information on how to benefit from the green economic recovery and includes eight practical first steps to becoming more sustainable, including how to audit your processes and knowing your supply chain.