The Nudge Factor: Influencing the Sustainable Consumer

Speakers

• Christine Cea, Director of Marketing Communications, Unilever
• Richard Gillies, Director of Plan A, CSR, Sustainable Business & M&S Energy, Marks and Spencer Plc
• Virginia Terry, Director, Advisory Services, BSR (Moderator)

Highlights

• Companies’ largest environmental impacts may not come from their direct operations. The sourcing of raw materials and the way products are consumed can create a much larger footprint, requiring companies to manage both direct impacts from factories, office, and transport, as well as the indirect impacts created throughout the product’s entire lifecycle.

• Sustainable consumption needs to be made more tangible for consumers. Consumers are not willing to sacrifice cost and convenience for sustainability attributes. Companies should demonstrate how sustainable choices can benefit families and households.

Quotes

“We cannot grow at any cost. We need to grow differently from before. Unilever aims to double in size while reducing our overall environmental footprint and increasing the social value of our brands.” —Christine Cea, Unilever

“We’ve got to get over producing products that are branded as sustainable but let the consumer down on some other attribute that they value.” —Richard Gillies, Marks and Spencer

“You have to create goods and services that take consumers on the journey with you. I see huge changes on sustainability that are equivalent to the industrial, IT, and agrarian revolutions that changed consumer consumption and behavior.” —Richard Gillies, Marks and Spencer

Overview

Terry kicked off the session by describing how companies are using the “nudge factor” to encourage consumers to make more sustainable choices. She emphasized the need for companies to help consumers move forward on their sustainability journeys. Companies that are publicly disclosing ambitious goals on sustainability problems should invite their consumers to be part of the solution. She asked the panelists to share examples of how they influence and engage consumers, raise awareness, and use other strategies to “nudge” consumers toward more sustainable consumption.

Cea described Unilever’s Sustainable Living Plan, which looks beyond its own operations to reduce the impacts across the whole lifecycle of its products. The plan includes 50 time-bound and measurable targets focused on health, hygiene, energy use, emissions, water, and sourcing. The plan has three objectives: help more than 1 billion people improve their health and well-being, halve the environmental impact of Unilever products, and source 100 percent of agricultural raw materials sustainably by 2020.

However, consumer behavior in many parts of the world pose challenges. Cea explained how many consumers in the developing world are unwilling to sacrifice cost and convenience. Unilever is seeking to address this challenge in three ways. First, the company is using innovations in technology to address the most pressing issues in developing markets. For instance, the company created its Purit water filter to provide clean, safe, and inexpensive drinking water in areas where there is limited infrastructure to provide this basic need. The product is already used by 15 million people in India, and the company hopes to reach a half billion people in Africa, Asia, and Latin America by 2020. Second, Unilever is giving consumers information that makes the benefits of sustainable lifestyles more tangible. Unilever promotes the Lifebuoy brand of soaps in developing markets through a campaign that educates consumers on the importance of personal hygiene. Third, Unilever is building trust with consumers through communications and partnerships. The company’s Turn off the Tap campaign educates consumers in the developed world about the personal benefits of shortening their showers to save money and water. Unilever promotes this concept via social media in partnership with Recyclebank.

Next, Gillies described Marks and Spencer’s sustainability strategy, Plan A, which sets measurable targets in five areas: planet, waste, raw materials, fair partner, and health. One aspect of the initiative that has become an integral part of Marks and Spencer’s business strategy is a more sustainable product offering in apparel and food. The most famous example is the company’s carbon-neutral bra, which uses low-impact cotton and is produced in an environmentally friendly factory in Sri Lanka. That item has captured 40 percent of the UK market.

Stressing the need to redefine value for consumers, Gillies described how Marks and Spencer is addressing what he sees as a paradox between fashion and sustainability. The apparel market has become more fashion based and disposable, with consumers deriving value from volume and change in clothing consumption. He challenged the audience to “reset” what constitutes value and prosperity. In partnership with Oxfam, the company is giving its consumers a voucher to receive UK£5 in exchange for returning their old clothes purchased from Marks and Spencer to reuse centers. The company then respins the fabric into new fiber, generating UK£7 million in additional revenue from the new products created. Similar to Unilever’s approach, Gillies emphasized the importance of new types of partnerships with credible and knowledgeable stakeholders.

Both Gillies and Cea concluded with remarks on the importance of reaching women and raising their awareness about how to make changes in their households.