Consider, political leadership is nothing without the consent of those they lead. Equally, businesses exist to serve their customers — and not the other way round. In these relationships, meeting the legitimate needs of consumers is key to gaining their buy-in and addressing the most critical issues of our time.
High up on that list of critical issues is the climate crisis. Political decisions may be vital to reducing and ending reliance on fossil fuels and excess greenhouse gases, but consumer actions will have the most significant impacts.
The recent IPCC 6th Assessment Report acknowledges the powerful role of consumption shifts in reaching decarbonization targets, showing that 40-70 percent of future emission reductions could be achieved by demand-side interventions. At the same time, consumers want change; GlobeScan research shows that on average 70 percent of people in every market are concerned about the climate crisis and want political and corporate leadership to solve it. Circular business models will not catch on without consumer adoption.
Let’s be honest, consumers have already borne the brunt of a lot of disruption recently. The world has lurched from the unsettling economic impacts of the pandemic to a war in Ukraine that has contributed to rising basic costs, such as food and fuel.
Climate change could slip down on consumer priorities if there is no action to ensure that sustainable choices aren’t expensive or unaffordable for all consumers, everywhere.
As people struggle, seemingly simplistic answers could be the default such as scapegoating the race to achieve net-zero. Even without short-termist provocateurs, it is clear that climate change could slip down on consumer priorities if there is no action to ensure that sustainable choices aren’t expensive or unaffordable for all consumers, everywhere.
Consumer buy-in is, therefore, needed in the solution. Climate change action must be linked to broader consumer empowerment or else decreasing consumer trust will be ripe for exploitation. This is why we have been advocating, most recently in Glasgow at the United Nations Climate Change Conference — COP 26 — for a more inclusive roadmap on what businesses should do and how other stakeholders can aid them so that consumers are landed with the minimum burden.
The Legitimate Consumer Needs as outlined in the UN Guidelines for Consumer Protection. Courtesy image: via Consumers International.
Gulf in delivering consumer protection and empowerment
At Consumers International we see increasing examples worldwide of consumers feeling they lack protection and losing trust in companies to put their interests first.
Our latest insight tool — the Consumer Protection and Empowerment Index — demonstrates gaps and where we might build trust for and with consumers. The Index is the first global assessment of how countries build, maintain and encourage safe, fair and sustainable markets for all across sectors. It has assessed 80 countries across five core areas of protection and empowerment and while the results show some positives, there is demonstrably much work to be done.
The average global score for the Index was just 53/100, which shows that we are not delivering consumer protection and empowerment. However, encouragingly, our findings show where we can focus and build across the five core areas of consumer protection and empowerment.
- Consumer protection must sit at the heart of business regulation. That means a systematic approach to ensure that at each stage of a consumer’s journey they have the tools and knowledge they need. Nearly half of countries have not yet had a constitutional provision for consumer protection.
- A knowledgeable and informed consumer is more likely to purchase well. Information for consumers must be easily accessible, clear, transparent and reasonable in its presentation. A Deloitte survey of 2,000 consumers in the United States found that 91 percent of people consent to legal terms and services conditions without reading them.
- There must be global redress systems as more people shop online and internationally. In 2021, 2.14 billion people shopped online — over a quarter of the world’s population — which is politically unsustainable if left without safeguards or with patchy protection. Therefore redress, like transactions, must be applicable across borders and jurisdictions.
- Reassurance that consumers’ purchasing choices are doing the least harm to our planet is also important. Our research from 2020 found that only 19 percent of assessed labels give consumers quality information to make informed recycling and purchasing decisions. Consumers can’t be expected to trace the ecological journey and supply chain of each buy but regulation, best practice sharing and accurate labeling can help them make informed choices.
- Fast developing technology should also center consumer concerns. Doing so would ensure tomorrow’s tools are guided by long-lasting principles.
Future markets will need to evolve significantly to keep up with e-commerce and environmentally conscious consumers. Relationships cannot remain imbalanced, extractive and exploitative as coupled with current global challenges, consumers’ continued feeling of powerlessness could force a radical destabilization of democracies and economies.
The good news is that a global infrastructure of consumer advocacy organizations exists to build bridges with government, business and others to place consumer protection and empowerment at the heart of business models and legal frameworks. Every day, our members work tirelessly, using their local knowledge, skills, connections and often statutory rights for representation to government to do this.
In fact, our belief in multi-stakeholder collaboration between consumer organizations, businesses and government is the reason we have adapted our strategy to realize this alliance. That’s why our door is open to anyone wanting to work with us, so we can help deliver a safe and sustainable world from which we all flourish.
June 21, 2022 at 01:24PM GreenBiz