Index

CONSUMER AND THE ENVIRONMENT ......................................................................... 3

1. WHAT IS A GREEN ECONOMY AND GREEN CONSUMPTION ? .................................................. 3

2. SUSTAINABILITY IN PURCHASES ......................................................................................... 4

THE NOWADAYS CONSUMERS ........................................................................................ 4

1. THE NOWADAYS CONSUMER’S BELIEFS AND VIEWS ........................................................... 5

2. CONSUMER’S EMOTIONS .................................................................................................. 6

BRANDS WITH PURPOSE ................................................................................................... 7

1. IMPACT ON CONSUMERS ................................................................................................... 7

BIBLIOGRAPHY .................................................................................................................... 8

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 Consumer and the Environment

Nowadays the concept of green economy and green consumption has become more and

more present in the minds of consumers and companies, but it is still a concept to be

deconstructed. Companies nowadays do not look only at the profit, but also at all stakeholders,

being consumers, workers, the government, among others, in order to have a positive impact

on society. This report, made within the scope of the Consumer Psychology course, will talk

not only about the importance and impact that these practices have on society and the consumer

but also about the relevance that a company with purpose has and how it will touch the

emotions the consumer has.

1. What is a green economy and green consumption?

Nowadays, the debate between the economy and the environment is much talked about.

The importance of companies becoming sustainable has become indispensable for the

consumer.

"The environment and the economy are really both two sides of the same coin. If we cannot

sustain the environment, we cannot sustain ourselves" (Maathai, 2016). And this is what the

green economy is all about. According to the UN, the green economy is defined as being low

carbon, resource efficient and socially inclusive, based on economic growth and focused

equally on sustainability in order to avoid environmental destruction. Companies that commit

to these values will create value internally but also externally. The role and objective of the

green economy and green consumption are to improve production and consumption processes

to reduce the negative impacts and habits have on the environment.

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 2. Sustainability in purchases

According to a study "The Elusive Green Consumer" (2019), by Harvard Business Review,

consumers today are demanding more that brands have a purpose and that they focus on

sustainability. However, in a recent survey conducted by these researchers, only 65% of people

say they seek purpose-driven brands, and only 26% buy from those same brands. The same

study also says that people are easily influenced. "People are influenced to install solar panels

by near neighbours who have done so", so people feel the social pressure and want to have the

same or better things than the people around them.

Could it be that for consumers, the happiness of doing good can then be found in the goods

that come from a sustainable economy? This debate in consumer psychology has been

increasingly discussed. Consumers are looking for these products more and more, looking for

some happiness or to fill a void they may feel (2010, Jasson-Boyd).

According to the same study, the perceived view about this type of products, will differ

from consumers’ cultural background. This can be because in different countries people deal

with the environmental issues in different ways. For example, German consumers view humans

as an integral part of the ecologic system, while Northern Americans have a desire to master

their environment (2010, Jasson-Boyd). However, it is also proved that a positive perception

of the environment does not necessarily translate in an increase in green consumption.

The Nowadays Consumers

This shift towards more sustainable consumption is mainly supported by two major

generations, the Millennials and Generation Z.

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 1. The Nowadays Consumer’s Beliefs and Views

Millennials are aged between 26 and 41. This generation, according to Forbes (2021), is

considered "the new financial powerhouse generation", so they have an in-depth insight into

various subjects such as marketing and the economy in general. For companies, it is important

to meet their expectations by changing their marketing strategies mainly because, according to

the World Economic Forum (2021), there are 1.8 billion Millennials on earth, representing

23% of the population and therefore being the largest generational economic force.

When faced with purchasing decisions, they consider environmental and social

responsibility-friendly brands, also seeking a personal connection with them. "Local sourcing,

ethical production, a great shopping experience" (2021, Costin), are some of the values brands

have to consider if they want to meet Millennials' expectations. The fair factor is really

important for this generation.

Generation Z is part of a younger consumer segment, aged between 10 and 25. According

to VOGUE Business (2021), this generation seeks a great in-store experience, being guided by

the trends and the relevance of each brand. However, 38% of this group is more likely to shop

online when compared to other generations, mainly due to the pandemic. According to the

same magazine, this generation seeks products of higher quality online, and purchases are made

by a "buy now, pay later (BNPL) model. However, the search for products that offer a good

price-quality balance is very important. In addition, Gen Z is looking for a lot of second-hand

products.

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 2. Consumer’s Emotions

Emotions are a very important part when it comes to decision making, although sometimes

they can make our decision a bit irrational, in cases where the consumer is loss averse, such as

in the stock market (2022, Fernandes).

When it comes to sustainability, emotional appeal is quite important since people are more

likely to engage in behaviours when they derive from positive thoughts doing so (2019; White.,

Hardisty., Habib.). This research found that hope and pride are very important in driving

sustainable consumption.

When it comes to business communication and marketing and based on the same article,

consumers prefer to see something that shocks them moderately, i.e. ads and advertising that

provokes a great sense of guilt will make them upset and they will be less likely to buy the

product or service that is sold. A rational appeal is therefore essential, and consumers demand

that the information be well-founded, as this type of advertising can be very persuasive. It has

been studied, by the same researchers, that due to the loss aversion that people tend to have, it

is a good strategy to formulate choices for the consumer about what is at stake. Saying, for

example, that if they choose a less sustainable toothbrush it will result in an environmental loss

to a community will make consumers buy more of the sustainable option out of loss aversion.

Even if there are still few studies on how to increase the consumption of sustainable goods,

and companies create awareness for this type of issues, there are 4 techniques that could change

the thinking and behaviour of consumers. The first is modelling, where people learn by

observing others, the second is stimulus control management, where people are exposed to

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stimuli before doing certain things, the third is contingency management in which people

receive rewards or punishments when they perform a certain behaviour and the fourth is norm

deviation (2010, Jansson-Boyd).

Brands with purpose

Companies and brands with a purpose are in great demand these days. As we can see from

the consumer study done earlier, consumers are looking for something they can identify with

and for them it is important to feel a personal connection to the brand and products. However,

as I say brand purpose is not a "one size fits all" proposition.

1. Impact on consumers

According to a recent survey, when a company has a purpose, 78% of respondents would

be more willing to work in the company, 76% would trust the company more and 72% of these

will be more loyal to the company (2022, Nolden).

Today there is a lot of competition between companies and in the economy. The brand

purpose may be the best way to get brand loyalty, since, as already mentioned, they don't only

look at the price. Today there is a great need for people to feel that the company's values are

related to their own. Addressing problems such as social injustice, sustainability, diversity, and

inclusion are taken very seriously, especially by today's consumers. "People care that you care"

since about 80% of people believe that companies have more responsibility than ever to touch

on social and environmental issues (2022, Nolden). Thus, having a purpose is only half of the

way, it will require a long-term investment, which should be monitored and also reviewed.

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 Bibliography

Branco, C., Hardisty, D. J., & Habib, R. (2020, June 1). The elusive green consumer. Harvard
Business Review. Retrieved from https://hbr.org/2019/07/the-elusive-green-consumer

Costin, G. (2021, December 10). Author post: Millennial spending habits and why they buy.
Forbes. Retrieved from
https://www.forbes.com/sites/forbesbooksauthors/2019/05/01/millennial-spending-habits-
and-why-they-buy/?sh=7d756ea8740b

Jansson-Boyd, C. V. (2010). Consumer Psychology. McGraw-Hill.

Neufeld, D. (2021, November 8). There are 1.8 billion millennials on Earth. here's where
they live. World Economic Forum. Retrieved from
https://www.weforum.org/agenda/2021/11/millennials-world-regional-breakdown/

Nolden, C. (2022, January 18). Why brand purpose is more important than ever! Burrelles.
Retrieved from https://burrelles.com/why-brand-purpose-is-more-important-than-ever/

Petro, G. (2021, December 10). Gen Z is emerging as the sustainability generation. Forbes.
Retrieved from https://www.forbes.com/sites/gregpetro/2021/04/30/gen-z-is-emerging-as-
the-sustainability-generation/?sh=2d8b557e8699

UN. (n.d.). Green Economy [web log]. Retrieved from https://www.unep.org/regions/asia-

and-pacific/regional-initiatives/supporting-resource-efficiency/green-economy.

Vogue Business for PayPal. (2021, August 6). Gen Z shopping trends uncovered. Vogue
Business. Retrieved from https://www.voguebusiness.com/consumers/gen-z-shopping-trends-
uncovered-pay-pal