60% of GCC businesses are off track to meet their sustainability goals, says Bain & Company


November 22, 2023 | By RetailME Bureau

60% of GCC businesses are off track to meet their sustainability goals, says Bain & Company

New research from Bain & Company shows more than 60% of businesses in the GCC region are currently off track to achieve their sustainability goals. The study emphasizes the pivotal role of technology, policy and behaviour change in achieving sustainable practices. An increasingly environmentally conscious base of consumers and employees in the GCC may prove instrumental in steering business towards their sustainability targets.

Before getting into what businesses can do, a quick look at some “surprising truths” about consumers and their sustainability commitments.

  • Baby boomers are often just as concerned about sustainability as Gen Z. Many companies have long viewed younger consumers as more focused on sustainability than their older counterparts, but the reality is not as clear-cut. For example, 72% of Gen Z consumers and 68% of boomers globally are very or extremely concerned about the environment, but in countries as diverse as India, France and Japan, boomers are more concerned.
  • Consumers are recommending brands if they are supporting social causes. As concerns grow, consumers are looking to make environmentally sound choices – 82% of consumers in Europe, the Middle East and Africa are likely to recommend a brand after learning about social causes it supports.
  • Consumer behaviour can change more quickly than many companies anticipate, with external factors such as government regulation heavily influencing the market. For instance, in the UAE, the imposition of charges on plastic bags in supermarkets has swiftly prompted a notable reduction in their usage, showcasing the significant impact of government initiatives on shaping consumer behaviour.
  • There is a disconnect between what consumers want and what most companies sell. Worldwide, 48% of consumers consider how products are used when thinking about sustainability. These consumers are more concerned about how a product can be reused, its durability and how it will minimise waste. In contrast, most companies sell sustainable goods based on factors such as how they are made, their natural ingredients and the farming practices deployed. These factors cause many consumers to conflate “sustainable” with “premium.” One result of this disconnect is that nearly half of all developed-market consumers believe that living sustainably is too expensive. By comparison, roughly 35% of consumers in fast-growing markets believe this.
  • Consumers struggle to identify sustainable products and don’t trust corporations to make them. In Bain’s survey, 50% of consumers said sustainability is one of their top four key purchase criteria when shopping. Yet they may be making decisions based on misconceptions. When asked to determine which of two given products generated higher carbon emissions, consumers were wrong or didn’t know about 75% of the time. Consumers say they rely most on labels and certifications to identify sustainable products, yet most were unable to accurately describe the meaning behind common sustainability logos, such as organic production or Fairtrade. A lack of trust in corporations compounds the issue. Bain found only 28% of consumers trust large corporations to create genuinely sustainable products, compared to 45% who trust small, independent businesses.

Over to what businesses can do to get back on track. Here are some recommendations from Bain.

  • Devise a future-proof and flexible strategy. Few companies plan beyond the typical 3-year strategic planning window, and even those that do look out 5 to 10 years tend to focus on expectations for technology adoption. These plans fail to fully consider two other factors that move just as rapidly and with as big an impact: regulations and consumer behavior.
  • Acknowledge a fragmented consumer base. Companies need to deaverage consumers and innovate products and design propositions that appeal to different segments— local markets, consumers with different definitions of sustainability, and consumers with a range of purchasing motivations.
  • Test and learn to determine what works—and repeat. In such a fluid environment, companies can lean aggressively on marketing experimentation, using digital tools to quickly test the sustainability messages that resonate with different segments and adapt accordingly. It’s a way to help consumers gain enough clarity to make decisions that are consistent with their values.
  • Get out in front of regulations. As we’ve seen throughout the world, government policy inevitably becomes a huge contributor to changing consumer behavior. Across all industries, companies need to be at the forefront of helping to shape the regulations affecting their business. A company’s ability to anticipate policy shifts and build future-proof portfolios will help determine whether it can outpace competitors.
  • Upskill employees to rise to the challenge: Bain found that 75% of business leaders believe they have not embedded sustainability well into their business. The instinct of many CEOs is to prioritise external hiring to address all skill gaps, including in sustainability. Bain advocates for addressing sustainability’s challenges through a combination of smart upskilling and cultivating a learning mindset. A new Bain survey of 4,700 people found 63% felt different skills and behaviours would be required for their company to execute on its ESG ambition or strategy. Yet only 45% of nonmanagers said their employer offers the reskilling and upskilling opportunities that would enable internal mobility.

Previous Article Next Article

SHARE

YOU MAY ALSO LIKE /


#Topshelftalks session at Food Business Forum 2024

Industry pioneers are embracing a comprehensive strategy that integrates consumer insights, digital 

Continue Reading

July 3, 2024 | By Anurima Das
#EdgeOfTomorrow session at Food Business Forum 2024

The regional grocery retail market is evolving fast keeping pace with constantly 

Continue Reading

July 3, 2024 | By Rupkatha B
#CartToCouch session at Food Business Forum 2024

If anything, the Middle East market is excited about quick commerce – 

Continue Reading

July 2, 2024 | By Rupkatha B
#EcoEchoes session at Food Business Forum 2024

From ethical and local sourcing to adopting cutting-edge technologies to curb food 

Continue Reading

July 2, 2024 | By Rupkatha B
#ByteSizedBreakthroughs session at Food Business Forum 2024

The regional grocery retail market is becoming more and more diverse, offering 

Continue Reading

July 2, 2024 | By Rupkatha B

Spinneys, the leading premium fresh food retailer, has announced the opening of 

Continue Reading

June 24, 2024 | By RetailME Bureau

Spinneys has announced the launch of The Kitchen by Spinneys, its first-ever 

Continue Reading

May 20, 2024 | By RetailME Bureau

In a move set to redefine the landscape of the Fast Moving 

Continue Reading

May 16, 2024 | By RetailME Bureau
Sunil Kumar and Ali Saeed Juma Albwardy, Spinneys

One of UAE’s leading fresh food retailers, Spinneys has announced its intention 

Continue Reading

April 19, 2024 | By RetailME Bureau
Laura Manning, Managing Director & Founder, BRW Society

Launched in 2019 by Laura Manning, UAE-based homegrown brand BRW Society completes 

Continue Reading

April 5, 2024 | By Rupkatha B
Rajiv Warrier, Chief Executive Officer, Choithrams

Since the launch of its first store in the UAE five decades 

Continue Reading

March 20, 2024 | By RetailME Bureau
Dr. Dhananjay Datar Chairman & Managing Director ADIL Trading Co. LLC

Dr. Dhananjay Datar Chairman & Managing Director ADIL Trading Co. LLC holds 

Continue Reading

February 29, 2024 | By Rupkatha B




Download Images RetailME Magazine