A recent report by Bain and Company reveals a decline in the prioritization of sustainability among CEOs globally, even as consumers and corporate buyers increasingly focus on climate change and sustainable practices. The report, based on surveys of over 500 B2B buyers and sellers across various industries and nearly 19,000 consumers across 10 countries, highlights a shift from the initial enthusiasm around sustainability commitments to a more pragmatic realization of the complexities involved in achieving these goals. Bain’s findings show that sustainability has dropped on the priority list for many executives, who are now dealing with other challenges such as inflation, disruptive technologies, and geopolitical uncertainties. Many companies are also grappling with the realization that achieving sustainability goals is more challenging than anticipated. For example, nearly a third of companies are falling behind on their Scope 1 and 2 emissions reduction targets, and more than half are lagging on their Scope 3 goals. However, while corporate leaders may be de-prioritizing sustainability, consumer and business buyer concerns about climate change are rising. Over 60% of consumers surveyed reported an increased concern about climate change in the past two years, particularly in areas experiencing extreme weather events. Additionally, more than three-quarters of respondents believe in the importance of a sustainable lifestyle due to the impact of individual actions, driving behaviors like recycling, reducing disposable product use, minimizing air travel, and cutting down on meat or dairy. Many consumers are willing to pay a premium for sustainable products, with U.S. respondents indicating a willingness to pay up to 10% more for products with minimal environmental impact.
Corporate buyers are also placing greater emphasis on sustainability, with it becoming one of the top three purchasing criteria. According to the report, 36% of B2B customers are already prepared to change suppliers if sustainability expectations are not met, with 57% expecting to do so within the next three years. Nearly half of the B2B respondents are willing to pay a premium of 5% or more for sustainable products or services, and only 6% indicated they would not pay any premium for sustainability. In response to these changing dynamics, suppliers are adjusting their strategies to cater to the demand for sustainability, although there are gaps. While 85% of suppliers claim to be embedding sustainability into their offerings, only about half of buyers believe these sustainable options meet their expectations. Bain’s Global Sustainability Practice Leader, Jean-Charles van den Branden, emphasized that maintaining focus on sustainability remains crucial as it presents valuable opportunities for forward-thinking companies.