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Responsible Retail – The value of environmental sustainable practices in the eye of the consumer.

In the last two decades, retailers in Canada and around the world have embraced environmentalism and stricter recycling policies for a host of reasons. But whether it’s a matter of ethics or simple cost cutting, studies show that consumers are more eager to shop at companies with a reputation for taking care of the environment.

As global warming and other green politics have become mainstream social issues, Canadians have made a greater effort to divert waste in their own homes. Thanks to recycling services offered in hundreds of municipalities across the country, consumers are able to do their part. In a 2008 study, Statistics Canada determined that while residential waste made up only 30% of material sent to landfills in Canada, residential recycling made up over 50% of waste diverted, and was largely responsible for the average diversion rate increasing from 22% in 2002, to 25% in 2008.  Some of these recycling programs are wholly or partially funded by the brand owners and retailers that put the material into the marketplace. Take Ontario, where since 2004, business has funded 50 per cent of the residential packaging and printed paper program. A similar story exists in Manitoba, where business pays for up to 80 per cent of the cost of collecting and processing recyclables since 2010, and in Quebec where business currently pays for 100 per cent of the costs. Beginning in 2014, businesses in British Columbia will start to fully fund the cost of operating the program there. And many more municipalities across the country are funding recycling services for their residents. All of this is helping to make recycling accessible to the consumer and encourage a greater sense of responsibility at home to recycle and divert waste, married with an expectation that businesses and retailers do the same.

Bernadette Jarvis, an office manager from Toronto, says that when she’s shopping for her family, a store’s environmental policies rank just under cost in terms of importance. While Jarvis admits she hasn’t always cared about the environment, she has become more concerned recently and wants to set a good example for her two teenaged children. While cost is still the deciding factor in her shopping choices, environmental policies often serve as a “tie breaker” between two stores in the same price range. Now a meticulous recycler, Jarvis says she prefers to shop at stores that use less packaging, and let customers use old boxes to carry home their groceries instead of plastic or cloth bags. “If the price is more or less equal, I’d rather shop at a store that’s conscientious,” she says. “It’s good to know that when I’m at the supermarket I’m not undoing the good work I do at home.”

A 2012 Neilson study on cause marketing, which surveyed 28,000 consumers in 56 countries, revealed that a majority of respondents (66%) preferred to buy products from companies with strong environmental policies.  The same number said they were willing to pay extra at retailers that use sustainable packaging, have eliminated plastic bags and use digital technology as opposed to paper for transactions. In 2009, a report by global consulting firm Deloitte LLP determined that for 20% of consumers, environmental policies are more important than pre-established brand loyalty. While young consumers were the most dogmatic in their preferences for green companies, the Deloitte study found that those who actually make a point of buying from sustainable businesses were older (part of the baby-boomer generation), more affluent, and typically have smaller households and more formal education. Moreover, when shopping, consumers who said they value sustainability shopped 26% more often than their indifferent peers, and were 29% more likely to buy more than they had planned on shopping trips. The study also determined that they were less price sensitive than the larger population.

For Rita Lupi, a legal assistant from Oakville, retailers’ environmental policies are imperative, and she’s willing to pay more for sustainably. Since the birth of her son, the mother of one says that she has become an avid reader of labels, and before she shops at a new retailer, she researches them online to ensure that they are an ethical and sustainable company. “Having my son has made me much more aware of what is going into my home, which is his immediate environment.” She says. I never buy anything made with toxic substances, I’d much rather pay more for a product that is good for the planet.” Lupi has been teaching her son, now nine, about the environment for years, and says sorting and taking out the recycling was his first household chore. “I work hard to teach my son about what’s good for the environment, so of course businesses have a responsibility to do their part.

According to Deloitte, 30% of consumers who do not shop with sustainability in mind would be willing to shop “green” if they were aware of which products are actually good for the environment. Many retailers, they found, under-advertise their green credentials (largely in fear of “greenwashing” backlash) when the reality is that consumers would like to hear more, not less, about a company’s efforts to help the environment.  Consumers also expressed a desire for more labeling, and more in-store help from retailers to help them learn about which products are made from sustainable materials and how that benefits the environment overall. Retailers that carry sustainable products and advertise their efforts could potentially turn many consumers into green converts and loyal shoppers.

In the last decade, Canadians have been asked to recycle more and take responsibility for the state of the environment within their own homes. The statistics show that families and individuals have risen to the challenge. Consumers are increasingly looking to business and retailers to do their part, and many are pleased to see businesses playing a pivotal role, such as their involvement in funding recycling systems in many Canadian provinces, and providing the materials and information consumers need to make sustainable choices. Businesses that demonstrate their commitment to operating in an environmentally sustainable way will benefit from their efforts, not only by boosting their brand and gaining customer loyalty, but by helping consumers who want to do right by their families, their environment and their community.