Businesses are set to face enormous pressure in 2023 with Australian consumers demanding cheaper goods and services while pushing for higher Environmental, Social, and Governance (ESG) standards for the businesses they buy from.
The the newly-released Purpose Premium survey, conducted by Porter Novelli and market research agency Quantum Market Research, which analyses purpose and reputation in the minds of consumers, employees and investors, also reveals that many Australians are increasingly worried about the cost of living, which has prompted them to prioritise “rational” benefits over “purpose-based” elements of corporate reputation. However, consumers remain deeply concerned about climate action, and following years of building frustration, expectations of brands and corporations in this area remain high.
When it comes to purchase decisions, the research notes that 47 per cent of consumers say they are loyal to price over purpose. However, at the same time, 88 per cent still agree that companies’ actions must align to their purpose, 74 per cent would only work for a company that has a positive impact, and 51 per cent reported they had divested from investments that did not align with their values.
“Australians are saying to businesses, ‘charge me less, pay me more, but invest more in ESG and sustainability’, at a time when many businesses already have their backs to the wall with out-of-control supply chain costs and a lack of access to talent and skills,” Porter Novelli CEO Rhys Ryan said.
“There has been a decade of performative purpose by companies saying they want to do the right thing,” Ryan added. “Now they are stuck in a real bind, as trust in brands is low, people want more, for less, and they still have the same high expectations on purpose. Business leaders need to meet these expectations while continuing to appease their major stakeholders, which is a real challenge.”
Quantum Market Research CEO Imogen Randell said that as Australians observe more and more goals and targets, but little in form of tangible action, they are increasingly sceptical of brands that don’t provide full transparency across their supply chains, ESG policies, or investment partners.
“It is easier than ever for Australians to find out exactly what a business stands for, while standing in the supermarket aisle, so ‘performative purpose’ is coming unstuck, as any whiff of greenwashing is quickly called out,” Randell said.
The study also notes a rise in scepticism, with 43 per cent of respondents agreeing brands are often pretending to be something they’re not. This was most apparent amongst young Australians, with 91 per cent of 18 to 24-year-olds reporting they researched some brands before purchasing its products or services.
“Consumers are tired of being told they need to make better purchase decisions,” Ryan said. “They want organisations to take the lead. This year, 62 per cent of respondents said agreed that brands know what they should be doing and want them to act on it. They don’t want to be ‘engaged in dialogue’ about it, they just want businesses to get on with it.”
