Businesses in Singapore, China and India are significantly underestimating customers’ demand for green products and services, says TÜV SÜD Asia Pacific, one of the world’s leading providers of testing, inspection and certification services.
TÜV SÜD today announced the results of Green Gauge 2010, an independent research project that compared consumer and business attitudes towards sustainable products and services.
Ishan Palit, chief executive officer of TÜV SÜD Asia Pacific, said that the study had yielded some surprising results. On average, 84 per cent of consumers polled were willing to pay a premium for products and services certified as green. The really surprising result, he said, was the amount customers were willing to add to the cost of the products: Singaporeans would pay an extra 11 per cent for certified products while Indians and Chinese would pay an additional 24 and 45 per cent, respectively.
Over 2,600 consumers were surveyed about their attitudes to environmental products, services and policies within the sectors of home electronics, food and beverage, and clothing and footwear.
Interviews conducted with over 460 management-level employees proved that businesses demonstrated a lack of awareness of their customers’ attitudes. In Singapore, where 72 per cent of consumers said they were willing to pay more for green certified products, businesses estimated that only 35 per cent of customers would be willing to pay a premium. In India, 86 per cent of consumers would pay a premium while businesses estimated that only 35 percent would be willing. Chinese business managers estimated that 60 percent of consumers would pay more when in fact 94 per cent of consumers polled expressed a willingness to pay a premium.
This lack of awareness translates into lost opportunity for businesses in Asia. Companies are accustomed to catering to consumer demand for sustainability in the West, but in Asia, they’re missing out, said Mr Palit.
“It does make genuine business sense to go green,” said Chong Weng Hoe, chief executive officer of TÜV SÜD PSB. He added that businesses should clearly communicate the fact that their products and services are green.
Business interviews indicated that corporations are falling short on sustainability. Only 43 per cent stated their companies offer green products or services, and an average of 74 percent of corporate respondents said that they were unaware of any sustainability policy at their company, either because there was no policy in place or because it had not been communicated.
Mr Palit attributed the gap in sustainability readiness to another of the study results: the majority of consumers believe the public bears responsibility for sustainability progress while businesses expect governments to take the lead.
Certification schemes are one way in which governments create demand. Systems such as Singapore’s mandatory energy labelling scheme for appliances play a significant role in influencing consumer behaviour. 90 percent of Singaporeans polled said that independent certification adds credibility to the product and affects their purchasing decisions.
Most companies interviewed admitted that compliance with industry and government regulations was the primary reason for adopting sustainability policies. Given that consumers and businesses overwhelming agreed that consumer interest will increase over the next five years, Mr. Palit suggested it was time for businesses in Asia to view market demand as a major motivating factor.
