The majority of consumers worldwide have changed their mind about buying from a company because of unethical business practices, or a lack of action on issues like climate change and diversity and inclusion, according to a new study.
Globally, over four in five (86%) consumers cite that a company’s credentials in climate change, diversity and inclusion, and ethical business practices heavily influence whether they buy from, or do business with, organisations. In fact, almost nine in 10 (88%) consumers say ethical and sustainable business practices are a key factor. What’s more, as many as two-thirds of consumers (66%) reveal they would stop buying from a business that did not have credentials in these areas or have plans to work on them in the next three years.
This is according to the new People, Planet, Data: Why Climate Change Action and CSR Have to be Data Driven study by Exasol, which indicates that issues like climate inaction are now a huge risk to business. More than a quarter of consumers (28%) believe the majority of businesses they purchase from are not doing enough to combat climate change. What’s more, 85% of consumers have changed their mind about purchasing something from a company because they felt it did not do enough about climate change. Businesses leaders should be very concerned, because over half of CSR decision makers believe that if companies fail to act on this soon, their business will no longer exist in 10 years.
ROADMAP FOR CHANGE
The challenge for businesses is that only two fifths (42%) have a fully formed roadmap in place to ensure more climate friendly business practices are put into place in the next 36 months, revealed the report. And three in 10 (31%) of those with no strategy at all had no plans to change this in the next 12 months. It’s time to reshape the conversation, and the actions taken. Around 82% of CSR decision makers agree they could make better decisions around climate change, diversity and inclusion practices, and ethical and sustainable business practices if they had access to data-led insights that informed these decisions.
“At Exasol, we believe in the power of data and using this to build a community that has a positive impact on our planet, from people and resources to policy. Companies, and importantly their senior leaders, have a central role to play in this. As such, it is critical that they educate themselves on, and invest in, digital tools that can help them democratise data. This will empower them to give ‘green teams’ – comprised of the CDO, data scientists and individuals from every business unit – access to the insights needed to evidence the value of CSR initiatives. With this insight they can affect real change,” stated Peter Jackson, Chief Data & Analytics Officer of Exasol.
Taking these steps now is essential. “We have an undeniable responsibility to do all that we can to save our planet for future generations, while also protecting our stakeholders’ interests. We have the data, we have the resources, and now we have the opportunity to make a difference,” added Jackson.
PROOF DEMANDED BY CONSUMERS
Consumers are also no longer comfortable with just taking the word of companies that they have previously purchased from. In fact, around two thirds of consumers (68%) reveal they will consider demanding data-backed evidence from organisations to prove they are making positive contributions in climate change, diversity and inclusion, and ethical and sustainable business practices in the next 36 months.
The sources of data consumers say they would trust most, in relation to a company’s position on climate change, include government-driven benchmarks, which show how the organisation they want to do business with measures up against competitors (41%). This is followed by industry-driven benchmarks, which show how the company stacks up against competitors (35%). Interestingly, consumers also reveal that they will trust videos from well-known climate change activists mentioning businesses in a positive light (33%). Read the full report here.
DIVERSE & INCLUSIVE ADS ALSO MATTER
Did you know that the majority of consumers also prefer to buy from brands with diverse and inclusive advertising? In fact, nearly two-thirds of consumers are likely to make an immediate purchase after seeing an advert they consider to be diverse, according to a recent survey. Inclusive ads also increase the likelihood of a second purchase. Click here to read more.
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