Consumers Like Circular Economy Practices—If They’re Not Too Much Of A Hassle

A significant number of consumers are influenced by sustainability concerns when deciding what to buy. And they’re embracing the concept of a circular economy—as long as it’s convenient. Those are some of the findings of a recent report called Learning from Consumers: How shifting demands are shaping companies’ circular economy transition from the financial services firm ING. The research, conducted by Longitude, a division of the Financial Times Group, surveyed 15,000 consumers in 11 countries across Europe, Asia-Pacific and North America during the second half of 2019. The focus was on fashion, food and electronics sectors. “A lot more people feel empowered to stop buying something because of its environmental impact,” says Anne van Riel, ING’s head of sustainable finance Americas. At the same time, however, “Many consumers might not know what a circular economy is and the broader relevance in their lives,” she says. The research defined circular economy practices as encompassing reducing the amount of resources used, recycling and reusing them in different ways. The research was done in two steps. One was determining whether sustainability questions are changing consumers’ buying habits. The next was an assessment of whether consumers are taking real circular economy-related actions, like recycling or renting clothing. For the first part, the research found that 83% of consumers believe their behaviors and purchasing choice can have a positive impact on addressing global environmental challenges. Some 59% are influenced by a product’s environmental impact when they decide what to buy. Also more consumers say environmental impact is a highly important factor in their purchasing behavior than is the brand name. And 38% have boycotted food brands because of perceived bad environmental practices. Among 18-24 year olds, it’s 47%.   Barriers But that doesn’t mean consumers are all in on circular models. In fact, the research shows that most of them are perfectly willing to take the necessary steps, as long as they’re convenient. For example, 41% think renting clothes would require a lot more effort and 36% say time is a barrier to repairing devices. Those aren’t the only barriers. There’s the problem of a lack of awareness about how to participate in circular behaviors. For example, only 21% think companies provide detailed information on the overall environmental impact of products. And, of course, also important is the matter of cost. About 54% of consumers choose low-cost fast-fashion clothing over pricier, more durable apparel. As you might expect, decision-making pertaining to environmental and circular economy concerns come up more often for consumers buying apparel and food vs. electronics. But, in any case, the bottom line, according to van Riel, is convenience and cost. “If you make it easy for people, they’ll do it,” she says. “The bigger the inconvenience, the harder it will become to act on it.” Thus, if consumers have to walk 20 blocks to return clothes, they’ll be less likely to repeat that behavior than if the apparel is picked up from their home. She points to recycling pioneer TerraCycle’s Loop initiative as a good example. Its circular shopping system packages products in refillable containers; customers put the empty receptacles in a Loop tote on their doorstep that is picked up by a delivery service, cleaned and returned. Three Types of Consumers The research also grouped consumers into three circular economy-related categories. “Circular champions” prioritize sustainability, but they need better information. They’re the folks who, say, compost at home; “Circular sympathizers” are concerned about the issue, but they’re only likely to adopt new behaviors that don’t significantly disrupt their existing lifestyles. In other words, they’ll buy second-hand clothes because they’re cheaper; and “Circular non-engagers”, which also is the largest group, are less engaged and need non-environmental incentives to change their M.O. Circular practices range from to what extent consumers are influenced by sustainability factors when buying things to whether consumers are adopting reusable food and drinks containers or buying and selling items in second-hand clothing and electronics markets. The research is the third in a series of circular economy-related reports from ING. Previous studies examined how companies are using sustainable financial strategies. That was followed by research into corporate awareness of circular economy issues. “For the third, we decided to go the other way and look at consumer awareness and if they’re making different buying decisions,” says van Riel.