HONG KONG – June 3, 2022 – Consumers in Asia-Pacific are a driving force behind the region’s interest in purchasing sustainable goods and are showing brands the importance and focus which should be placed on ESG. Among 16,000 Asia-Pacific consumers surveyed, 90% said that they are willing to spend a premium on sustainability products, but don’t buy these goods due to a lack of information or the simple fact that they don’t trust claims of sustainability. Another barrier consumers mentioned was the low availability of sustainable products. These and other findings are explored in Bain & Company’s new report, Unpacking Asia-Pacific Consumers’ New Love Affair with Sustainability released today.

“'It's fantastic to see consumers across Asia-Pacific demonstrating enthusiasm and demand for sustainable products, showcasing the vast opportunity brands have in front of them.” said David Zehner, partner and Asia-Pacific head of Bain & Company’s Consumer practice. “'By helping to educate consumers, improve availability and options, drive clearer, consistent information across all touchpoints like packaging and website, brands can take full advantage of this shopper inflection point and command the market going forward.”

Consumers stated that they care more about sustainability than ever before and that they are willing to spend more, but their actions fall short, which is the disconnect between intent and action—the vexing “say-do gap”—and it is a growing conundrum for all consumer products companies. Brands that successfully close the say-do gap by educating consumers, ensuring sustainable alternative options and availability, driving clear communication, and improving information sources are rewarded with future sales and valuable consumer recommendations. The outlook is bright for winners as 40% of consumers plan to increase their spending on sustainable products in the next three years.

Meet Asia-Pacific’s sustainable consumers

There were several surprising findings when Bain conducted its research to understand the key motivations behind consumer behavior.

• Asia-Pacific markets care about the environment just as much as Western markets—and they care even more about health-related ESG matters. Bain examined five broad consumer segments based on how much they care about sustainability and their purchasing preferences. Two of these five consumer segments are as large or larger in Asia-Pacific than in Europe or the US:
  • Environmentally and socially conscious: These consumers are primarily focused on the environment and social issues. They want to purchase healthy products that are good for the planet from companies that show concern for their employees and suppliers. This segment represented 14% of Asia-Pacific consumers, consistent with Europe and the US (both 14% as well).
  • Health conscious: This consumer segment is primarily concerned with making healthier choices for themselves and their families, often considering sustainable products as a route to better health. Additionally, they ranked ‘good for planet’ as one of their top three key purchasing criterion making them both health and environmentally focused. This cohort represents 51% of all consumers in Asia-Pacific, far more than Europe (27%) and the US (31%).
• Fast-growth markets care more than mature markets: Consumers surveyed in the region’s fast-growing markets (China, India, Indonesia, Thailand, Malaysia, the Philippines, and Vietnam) are more conscious of environmental and social factors than those in the more mature markets of Australia, Singapore, Japan and South Korea.
• Sustainability is equally important across age and income groups. Across Asia-Pacific, the percentage share of consumers identifying as either environmentally/socially conscious and health conscious was roughly consistent for survey participants aged 18 to 34 years old as it was for those aged 60 years and older (both about two-thirds of the total market) as well as respondents with lower income and higher income brackets (both between 60 and 70% of Asia-Pacific)

“'Consumers have spoken, and now it's up to the brands to listen, react, and lead the way by doubling down on ESG initiatives and also closing the 'say-do gap' to connect with their consumers even more.” said Zara Lightowler, Bain & Company associate partner and co-author of the report. “'Brands need to have a clear, purposeful plan in place to take advantage of this remarkable consumer opportunity the winners will drive growth and positive environmental outcomes at the same time.”

The research highlights that there are six critical steps CEOs can take now to maximize on this opportunity (addressing the “what”, the “how” and operationalization):

• WHAT: Set sustainability ambition: Define future-back company ambition on sustainability. Measure progress and identify gaps while setting or adjusting quantified targets and stretch commitments
• WHAT: Determine swords and shields: Swords are the ESG topics you want to engage consumers on—what you want them to love your brand for. Your Shields sit at the corporate level and protect against downside risk
• HOW: Define Corporate ESG solutions: Identify critical ESG solutions to deliver ambition for example to tackle emissions, circularity, sustainable sourcing, water stewardship, health and wellness or diversity and inclusion (the six largest ESG disruptions facing the consumer goods industry). Align critical functions against a common mission (R&D, sourcing, manufacturing, digital). Choose partnerships to scale
• HOW: Embed ESG in the heart of your brands: Putting ESG at the heart of your brands is critical to generating value from ESG. This requires adapting your brand purpose across the portfolio and embedding this across offer, pricing, in-store and consumer engagement
• OPERATIONALISATION: Outline roadmap and business case: Define the roadmap and change management plan, outline the business case (both sources of value and cost) and funding model beyond risk (market share gains, cost efficiencies, reduced cost of capital, talent benefits)  
• OPERATIONALISATION: Realign the operating model: Achieving this transition will require CEOs and leadership teams to be aligned and champion this. Revised operating models will need to reflect the importance of ESG across all levers—from incentives to decision rights and capabilities and talent

Editor’s note: To arrange a copy of the report or an interview with the authors, please contact Nicholas Worley at nicholas.worley@bain.com or +852 2978 8830.