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A third of UK shoppers demand greener products – and will pay more for them

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Consumers are actively seeking out more sustainable products and services and rewarding environmentally-friendly businesses in the wake of the coronavirus pandemic, a research report from E.ON reveals.

The pandemic has caused a big shift in consumer behaviour, with more than a third (36%) of Uk consumers saying that they’re buying products from companies with strong environmental credentials.  A further four in five (80%) say they are planning to purchase goods and services from businesses they know have made a concerted effort to be environmentally friendly.

Based on surveys of small business owners and consumers across the UK, E.ON’s Renewable Returns report looks at the impact of the pandemic on consumer and business behaviour as well as the potential for a ‘green economic recovery’ and the ways in which small and medium-sized businesses can benefit from it.

The research confirms that Covid-19 has radically changed consumer purchasing habits and that concerns about the environment are becoming more important in persuading people what to buy – and who to buy it from.

Of the consumers surveyed, 72% said they pay attention to whether a business acts in a climate-friendly way, and 65% feel it’s important the products or services they buy do not harm the environment.

Consumers are willing to pay a premium, too. The research shows more than a third (34%) of people have already knowingly paid more for ‘green’ products since the pandemic struck and more than half (51%) think the environmental credentials of a product or service are now just as important as the price they pay for it.

Commenting on the report, Michael Lewis, CEO of E.ON UK, says: “The coronavirus pandemic has heightened people’s concerns around the climate crisis and this has brought the environmental footprint of the products and services we buy into sharp focus. Small businesses are the engine of the British economy, and we can help make sure they’re equipped to take maximum advantage of the green economic recovery – providing the smart, personalised and sustainable solutions they need to be part of the new energy world. That means providing everything from 100% renewables-backed electricity at no extra cost for our direct customers3, to smart meters and new technologies such as electric vehicle charging, solar panels and battery storage.”

On average, consumers reported they are willing to pay 3% more for goods that are sustainable, with food and drink the area that consumers are most likely (33%) to demand sustainability in. Based on the average yearly turnover of an SME in 2019 – which was £370,000 according to government figures2 – this increase could be worth as much as £11,100 a year to annual earnings.

The increase in demand for sustainable products was most noticeable in London, where more than half (52%) of consumers said they’d changed their habits in this way. The shift was also particularly noticeable among millennials (those now in their 20s and 30s), with over half (54%) saying they now buy more from green businesses – however, the research shows people of all ages are now seeking more sustainable products

With regards to repeat business and referrals, more than three-quarters (78%) said they were more likely to recommend a business if they knew it made a sustained effort to be environmentally friendly.

Agriculture was the sector that had seen the biggest pressure for change, with 87% of small businesses saying their customers showed increased concern about the environment compared to last year. Nearly nine in ten (88%) SMEs in the agricultural sector also believe their appeal would be enhanced if they could demonstrate the progress they were making with regards to sustainability.

Knowing the commercial opportunities, seven in ten (70%) SMEs surveyed, across all sectors, said that improving their environmental credentials would be a top priority over the next 12 months. However, more than three quarters of SMEs (76%) felt there wasn’t enough guidance on how to improve their carbon reduction practices.

E.ON has created the Renewable Returns report as a tool for SMEs seeking information on how to become more sustainable. The report provides a one-stop-shop for information on how to benefit from the green economic recovery and includes eight practical first steps to becoming more sustainable, including how to audit your processes and knowing your supply chain.

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