Reducing “green premiums”
As the share of consumers that are willing to pay more for sustainability increases, the average premium decreases Share of consumers that are willing to pay more for sustainability As the share of consumers that are willing to pay more for sustainability increases, the average premium decreases Share of consumers that are willing to pay more for sustainability
While the downward pressure on “green premiums” may not motivate all companies to invest in sustainability, consider this: Companies that do not make changes at all will find their market share slowly eroding as sustainable options become widely available. For now, most industries at an aggregate level are still in either a nascent stage or developing stage when it comes to sustainability – no single industry has developed to the point where sustainability is table stakes. This means companies still have room to invest in sustainability while developing commercial strategies that can capture available price premiums.
In the 2022 Global Sustainability Study, across all industries, 68% of consumers stated that they were not willing to pay more for environmentally sustainable options. For the remaining 32% that are willing to pay more, they accept price premiums between 25 – 40% depending on the industry in question. While the interest in purchasing sustainably continues to grow, the same cannot be said for either the number of consumers that are willing to pay more or for the price premiums consumers consider acceptable. We have seen a downward trend year over year across both. Industries where sustainability has been important for longer are seeing it become a table-stakes criteria, which then has a negative impact on extra willingness-to-pay.
37% 37%
36% 36%
Average: 32% Average: 32%
34% 34%
32% 32%
30% 30%
29% 29%
Energy and utilities Energy and utilities
Travel and tourism Travel and tourism
Home construction and renovations Home construction and renovations
Financial services Financial services
Consumer goods and retail Consumer goods and retail
Automotive Automotive
Average sustainability premium of consumers that are willing to pay Average sustainability premium of consumers that are willing to pay
Average: 38% Average: 38%
41% 41%
38% 38%
38% 38%
37% 37%
37% 37%
36% 36%
Avg: 26% 27% 27% Avg: 26%
30% 30%
26% 26%
25% 25%
25% 25%
24% 24%
Energy and utilities Energy and utilities
Travel and tourism Travel and tourism
Automotive Automotive
Home construction and renovations
Financial services Financial services
Consumer goods and retail Consumer goods and retail
Home construction and renovations
Expensive premium for sustainable option (%)
Acceptable premium for sustainable option (%) Acceptable premium for sustainable option (%)
Expensive premium for sustainable option (%)
19 Environmental sustainability in business
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