CEOs wish you eat your greens and buy green too!
Analysis of earning calls across 4000 global organisations indicate that sustainability as a theme is growing in CEO conversations both in terms of volume and importance. It’s high time. Gen X has plundered the earth, but Gen Y and Gen Z care about its future.
While AI is white hot, sustainability continues to dominate the CEO conversation, and is a burning and continuing concern.
Beyond CEOs, even for ordinary consumers, globally and here in Malaysia, engagement with sustainability has shifted from a “nice to have” to becoming an essential part of daily life.
This integration into daily life is reflected in the growth of solar power generation for residential use, increase in electrical vehicle sales, availability of organic vegetable options in supermarkets, mainstreaming of thrift or used clothing….
Based on some of the recent projects done at Ampersand Advisory we are seeing the following are the core drivers for this change.
1. Consumer consciousness
Consumers are increasingly aware of the impact that their product choice has on the environment. The increasing availability of information has widened the awareness, especially for the younger generation who have grown up in an environment of green consciousness.
This change in consumer consciousness is reflected in consumer trend research.
For example, in a recent quantitative research done by Ampersand Advisory across 150 Malaysians, 80% of Malaysians mentioned that they would consider a fully electric or hybrid car for their next purchase.
In the same research, when asked what factors influenced or would influence them to buy an electric vehicle, while “cost savings” was the single biggest driver, the “environment consciousness” aka sustainability was the second most important.
This also indicatesi that electric vehicles as a category has moved from niche associations of environmental and technology benefits to more mainstream cost benefit analysis.
2. Regulatory changes
The Malaysian Government has in recent years have offered financial incentives that prompt environmentally friendly decisions.
For example, tax incentives for investments in solar panels and leasing electric vehicles have driven purchase decisions. Also households are now able to sell off their excess electricity generated back to the national grid and offset their costs.
This coupled with the Government’s on-going efforts in reduction of subsidies for fuel, electricity amongst higher income households is expected to nudge consumers further in taking up more green choices.
3. Increasing Competition
As more players enter the green markets,it offers greater choices and drives interest amongst consumers. The increase in competition also reduces prices and increases take-up of the services.
For example the solar panel installation market has seen the entry of 160 companies in the last few years with many of them listed on the stock market.
Similarly the used clothing imports into Malaysia grew to USD 160 million in 2021, a 23 times value growth in just one year and has continued steadily thereafter.
This exponential increase in competitive offerings within the Green market is making consumers review the Green product options from niche to mainstream.
So what can we expect for Green Choices for Malaysian consumers in the coming years?
As consumers get more comfortable making choices for a green conscious lifestyle and start taking decisions with regards to their travel, energy sources, food and fashion choices…this decision making mindset will also influence other category choices like packaging and ingredients of the shampoo used, labour practices in the hotel they stay in, percentage of recyclable components of the latest mobile phone etc.
These consumer choices, especially from the early majority, will provide the scale to reduce the cost premium associated with green options.Ensuring that the green options reach price parity with currently available products and services.
Thus ensuring that green choices become default rather than exception..
Putting money where our mouth (and heart) Is
At Ampersand Advisory we believe in investing our own funds in causes we strongly believe in. Sustainability and green living is one such cause which is becoming a core necessity for the world going forward.
One specific area of interest for us has been the impact of used clothing on the environment. The growth of the fast fashion industry, fast changing styles and lack of consumer education has resulted in used clothing landing up in landfills around the world.
With 92 million tonnes of used clothing ending up in landfills each year in Malaysia, there is a need to have a fresh perspective to bring a sustainable perspective to the fashion industry and consumers..
In order to bring this focus of green consciousness to the fashion industry, Ampersand Advisory via its subsidiary Canoy For Earth has a launched a limited collection of T-shirts.
The unique aspect of this T-shirt range is that for each one bought a tree is planted. Ensuring that the T-shirt goes beyond just being a fashion statement instead actually becomes an active component of reducing carbon in the atmosphere. Thus ensuring the consumers and the clothing both become an active participant in making the world more green.
Made from organic material and with clear traceability between the T-shirt purchase and the tree planting it ensures that consumers are able to clearly see the impact of their choices.
Thel T-shirt range is here https://ourcanopy.green/products/tee-tree-kid with the ability for individuals to make individual or corporate purchases.
Though still in a very early stage, Canopy shows how a fashion statement can go beyond YOLO (You only live once) to LOLO (Live our lives orderly).
By Navonil Roy and Sandeep Joseph
Sandeep Joseph is the CEO and co-founder of Ampersand Advisory, a leading agency that has been Campaign’s Independent Agency of the Year from 2019-2023, and has featured in the Financial Times Statista 500 High Growth Companies Asia Pacific for 2023 & 2024. He can be reached at [email protected] for debate and discussion.
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