UK businesses missing opportunities to cash in on ‘green’ premium

Consumers* are prepared to pay more for goods and services which are environmentally friendly, but businesses are missing out on extra revenue by failing to convince the public of their green credentials, a survey from BT showed.

59 per cent of people* would pay a ‘green premium’ if they believed it was eco-friendly.

However, the explosion of marketing and PR claims about companies’ green commitments has led to a climate of scepticism in the public. A third of consumers* surveyed believed that companies were exaggerating their sustainable policies – and ten per cent thought businesses made promises they had no intention of keeping.

A total of 97 per cent** believed that sustainability was important to a company’s reputation, and 89 per cent* said their customers expect them to operate in an environmentally friendly way. But a third** of businesses admitted they had no real interest in the issue and just wanted to ‘tick the box’ by complying with legal requirements.

But the research highlights the fact that consumers* are increasingly prepared to pay for what they see as greener products. Two-thirds think it is important that the company they are dealing with is environmentally and socially responsible. Over a quarter (28 per cent) have actually turned down a product or service from a supplier on the basis that the provider had a poor reputation for being socially or environmentally responsible.

There is also some scepticism about the issue from within the ranks of businesses’ own employees. A total of 43 per cent* said the issue was important to their organisation, but that other issues were higher priorities. Nearly a quarter (23 per cent) did not believe that their company was socially or environmentally responsible.

The survey also revealed some wide disparities between how different types of business regard sustainability. Top of the league was utilities, which were voted the most aware by 24 per cent of participants*. However, just five per cent thought that the transport sector or the media and leisure sector were the best. Bottom of the pile was the financial services industry, voted top by just three per cent.

Tim Smart, CEO, BT Global Services UK, said: “Small and large businesses are clearly missing a trick with regard to sustainable policies. Rather than bracketing these policies as something that companies do to protect their reputation or to tick a box, companies should look at sustainability as something which can benefit their own bottom line.

“At BT our own track record in this area has helped us to win deals, create new service offerings and build enthusiasm among our people. “

ENDS

About the research
BT commissioned Datamonitor to undertake the study of 350 senior executives in companies with more than 500 employees in the following sectors: retail, media, leisure, transport, logistics, construction, public sector, utilities and financial services. The research was conducted in November 2007.

Consumer and employee research was conducted by YouGov Plc. Total sample size was 618 adults who work in a business with 500 or more employees. Fieldwork was undertaken between 24th October - 5th November 2007. The survey was carried out online. The figures are unweighted.

* Research conducted by YouGov
**Research conducted by Datamonitor