An increasing consumer base is seeking out businesses that are verifiably demonstrating a commitment to environmental and social responsibility. They are getting wise to greenwashing, and are looking for transparency and authenticity to build brand trust.
Third party certification through the state-sponsored Colorado Green Business Network (CGBN) can help qualifying businesses achieve this consumer trust for free. Registered members can apply for recognition by completing four surveys that focus on areas such as policy, leadership, community engagement and resource reduction. That information is evaluated and scored by CGBN to determine if a business qualifies for bronze, silver or gold level recognition.
The Colorado Green Business Network of the Yampa Valley team poses with Terry Huffington of Elkstone Farm during a site visit as part of the program.
Is certification worth the effort? Recent sustainability market data suggests the answer is yes.
Demand for sustainability-labeled products is growing
Products marketed as sustainable now have an overall 17.3% market share compared to conventionally marketed products, according to the New York University Center for Sustainable Business 2022 Sustainable Market Share Index. That’s up 0.3% from 2021, and continues to grow despite inflation.
The report found that products marketed as sustainable accounted for nearly a third of the growth in consumer packaged goods from 2013 to 2022, growing approximately two times faster than conventionally marketed products.
A 2023 study conducted by McKinsey and NielsenIQ also showed a clear link between products making environmental, social and governance (ESG) related claims and consumer spending. Products making ESG-related claims averaged 28% cumulative growth from 2017-2022, in comparison to 20% for products making no such claims.
Responsible brands also enjoyed increased customer loyalty with 32-34% of consumers purchasing the brand three or more times annually versus under 30% for those not making such claims.
Demand for these products spread across a range of incomes, races and geographies. Age did play a bit of a factor, with two-thirds of Gen Z and Millennials expressing that at least one of the ESG issues is very important in driving their decision. This was also true, but less so, for Gen X, Baby Boomers and older consumers.
Shifting climates, values and demographic wealth create opportunity
The personal impact of extreme weather events and news about climate change has increased public concern about the environment. A study out of Bain & Company found that 72% of Gen Z and 68% of Baby Boomers globally are very or extremely concerned about the environment.
Colorado Green Business Network participants earn website seals and door stickers demonstrating their commitment to the environment.
NielsenIQ found that 78% of U.S. consumers say a sustainable lifestyle is important to them. Green purchasing is one way consumers can take a significant step to modify their lifestyle and be more sustainable. This is particularly true for Gen Z and Millennial customers, but a greater level of trust and authenticity is needed to capture this demographic.
A 2023 report out of Harvard Business Review found that sustainability builds trust, and when Gen Z and Millennial customers believe a brand cares about its impact on people and the environment, they are 27% more likely to purchase from that brand than older generations are.
Transparency is also key. Gen Z and Millennials are 30% more likely than older generations to spend more money on highly transparent brands and 20% more likely to choose it over its competitors. Come 2030 when Gen Z and Millennials surpass the purchasing power of Baby Boomers, this could add up to a $68 trillion transfer of wealth.
Consumer commitment to sustainability is here and sustainable labels and certifications matter. The Colorado Green Business Network, and your local Yampa Valley Green Business team, can help your business become a climate leader and grasp the competitive advantage that comes with differentiating your business as truly responsible.
Attend the next ‘Business Leadership for Climate’ luncheon workshop on March 27 to learn more about the benefits of recognition and achievable steps to get you there.
You can also learn more about the program by visiting yvsc.org/colorado-green-business-network/.
