Will Consumers Pay More For Products From Socially Responsible Companies?

October 15, 2015

Nielsen-Paying-Premium-Sustainable-Products-Oct2015During the past month, a few studies have been released examining consumer’s attitudes towards corporate social responsibility (CSR) programs and the effect they have on purchasing behavior. The reports suggest that consumer inclination to pay extra for sustainable products is on the rise, and that CSR programs have a sizable influence on a group that has a certain appeal to marketers: Millennials.

In its latest annual study [download page] on this topic, Nielsen reveals that almost two-thirds (66%) of consumers are willing to pay extra for products and services that come from companies who are committed to positive social and environmental impact. That represents a sizable jump from 55% last year and 50% the year before.

Interestingly, willingness to pay more is consistent across income groups, per the report. When sorting by age, though, the study reveals a strong increase in the percentage of youth with that inclination. Indeed, almost three-quarters of Millennials (age undefined in the report, but likely around the age 20-34) claimed that they would pay more for sustainable products, up from about half last year. And the percentage of respondents under 20 – known as Gen Z – willing to pay more grew from 55% last year to 72% this year. By comparison, 51% of Boomers (ages 50-64) said that they would pay a premium for sustainable products.

Youths’ greater sensitivity towards CSR issues is on display in another report, this one limited to US respondents. In Cone Communications’ “Millennials CSR Study” [pdf], 70% of Millennials (18-34) said they would be willing to pay more for a socially or environmentally responsible product, versus 66% of US adults overall. The propensity to pay more was particularly evident among female Millennials (75%) and affluent ($100k+ in household income) Millennials (79%).

Female Millennials appear to be some of the most strident supporters of companies’ CSR programs. Among the various Millennial segments identified (by age, gender, affluence and parenthood), female Millennials emerged as the most likely to:

  • Buy a product with a social and/or environmental benefit, given the opportunity (90%, versus the 83% adult average);
  • Tell their friends and family about a company’s CSR efforts (86%, versus the 72% adult average); and
  • Be more loyal to a company that supports a social or environmental issue (91%, versus the 87% adult average).

Meanwhile, another survey, this time from Aflac [pdf], supports the greater emphasis on CSR among US Millennials. For example, almost two-thirds (66%) of Millennials (18-34) are likely to invest in a company well-known for its CSR program, compared to 48% of adults aged 35 and older. Additionally, 92% of Millennials reported being more likely to purchase from an ethical company, and 82% believe that companies that stay true to their ethics and values outperform others in their field.

In sum, the studies provide additional weight to the idea that corporate social responsibility is an important consideration for Millennials. It’s also true that claims of willingness to pay more for sustainable products may not always translate to action. Yet the inclination appears to be there: after all, a study last year indicated that for a majority (55%) of Millennials, a company’s CSR reputation at least sometimes affects their purchase decisions

About the Data: The Nielsen Global Survey of Corporate Social Responsibility and Sustainability was conducted between Feb. 23-March 13, 2015, and polled more than 30,000 consumers in 60 countries throughout Asia-Pacific, Europe, Latin America, the Middle East, Africa, and North America.

The sample has quotas based on age and sex for each country based on its internet users, and is weighted to be representative of Internet consumers. It has a margin of error of ±0.6 percent. This Nielsen survey is based only on the behavior of respondents with online access. Internet penetration rates vary by country. Nielsen uses a minimum reporting standard of 60 percent internet penetration or an online population of 10 million for survey inclusion.

The 2015 Cone Communications Millennial CSR Study presents the findings of an online survey conducted February 18 ”“ March 6, 2015 by Ebiquity among a demographically representative random sample of 1,003 adults, comprising 500 men and 503 women, ages 18-34. The margin of error associated with a sample of this size is ± 3% at a 95% level of confidence.

Aflac’s research findings are based on a survey fielded in the United States between Aug. 18 and Sept. 2, 2015. For the survey, 6,000 respondents (2,000 nationally representative and 400 within each of the top-10 DMAs) were asked about their thoughts regarding various aspects of corporate social responsibility.

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