Environmental concerns have become more important to consumers, leading many companies to design products around sustainability principles. But there’s a big question that remains to be solved: Will a broad segment of society pay a premium to feel better about the environment?
A 2017 study in the Journal of Mechanical Design revealed that people were more willing to buy green if a product highlighted sustainable features, which appealed to consumers’ environmental consciousness. A 2015 Nielsen report found 45 percent of global respondents were willing to pay more for an environmentally friendly product, and 41 percent were willing to pay more for environmentally friendly packaging. Unilever even conducted its own study and highlighted sustainable purchasing while promoting its own sustainable efforts.
“[Consumers] just care more about the environment,” said Billy Pizer, Ph.D., a professor in the Sanford School of Public Policy at Duke and faculty fellow in the Nicholas Institute for Environmental Policy Solutions. “Environmental problems are more palpable now than they were 10 or 15 years ago.” Pizer believes increased media attention to problems such as pollution and climate change also has contributed to awareness.
Turning trash into products
Repurposing trash is a popular way to make an impact. Many companies are making products from recycled materials as a way to bring their environmentally friendly practices to the forefront.
Pentatonic, a European furniture company, makes all its furniture from post-consumer trash, and the cycle never ends. The company can recycle its own products into new products at the end of useful life, bringing the consumer into the product supply chain.
Soap company Method launched a dish and hand soap packaged in bottles made of recycled plastic from the ocean, a global garbage problem that has received increased attention.
The shoe company Allbirds, which makes shoes from sheep wool, makes laces from recycled bottles. Its packaging is 90 percent recycled cardboard.
Nike and the U.S. National Soccer Team have showcased the power of recycling — the yarn for the shirts, shorts and socks consists of recycled plastic, and each uniform uses 16 plastic bottles. Nike, which uses recycled polyester in many of its products, said it has saved 3 billion plastic bottles since 2010.
The EcoHelmet is made completely from recycled paper, and its ability to fold up makes it perfect for bike-share services. The helmet passes the standards from the U.S. Consumer Product Safety Commission.
New uses for organic waste are also leading to product development.
British retailer Marks & Spencer’s Pure Super Grape products are made from waste pinot noir grape skins from the company’s Chapel Down vineyard. The extract is rich in resveratrol, a potent antioxidant.
Ecovative makes packing material from farm waste and mushroom roots.
The economics remain uncertain
Kevin Bone, director of The Cooper Union Institute for Sustainable Design, said dwindling resources make sustainable design economically favorable. Schools shouldn’t view sustainable design as a niche skill. “It’s essential for all students at all schools all across the world,” Bone said. “All educators have to become proficient to some degree.”
But the question becomes whether or not people are willing to reward companies and pay more for something that’s environmentally friendly. Bryan Bollinger, an assistant professor at Duke’s Fuqua School of Business, said consumers are not usually willing to sacrifice product efficacy for environmental friendliness. But if the eco-friendly product works just as well as the traditional product, consumers might be willing to pay a little more.
“I believe consumers are paying more attention,” Bollinger said. “I believe there is more transparency.”
There are examples outside the consumer market that show sustainable design can command premium pricing. A 2010 study in the American Economic Review found eco-friendly buildings commanded higher rents by about 3 percent and sold higher by 16 percent. This correlation doesn’t necessarily mean causation, and overall, there are not yet enough economic success stories about eco-friendly companies to prove causation.
Dr. William Schulze, a professor of agricultural economics and public policy at Cornell University, said the motivations for sustainable purchasing range from altruism to self-image and reputation. These consumers tend to be more educated and have a higher income, making them prime targets for retailers.
“The problem for companies is that green-washing has been common, so consumers have become wary of so-called green products,” Schulze wrote via email. “Messaging in a convincing way with documentation of the actual green characteristics of the product are critical. There are a number of organizations that have arisen to certify green products, but none has become universally recognized or accepted.”
Greenwashing refers to companies falsely marketing products as eco-friendly. It can take a variety of forms, such as being purposefully vague (think “all natural”) or making unfounded claims. In 2013 the International Bottled Water Association labeled the industry the “face for positive change” for Earth Day. In reality, almost 70 percent of the billions of plastic water bottles bought each year don’t get recycled.