Economy vs environment?
A little over two months after Covid-19 has hit Europe with its full force and the effects on our society and economy are already substantial. The way we consume has changed accordingly: People leave their house only if necessary, eat less outdoors, don't travel; worry about their jobs or try to handle home office and child care at the same time, or spend their time worrying about loved ones. It is no surprise that retail sales have suffered a great decline while online sales have increased. While governments are trying to support and save small retail businesses, there are also big companies in need of help, which – in Germany, for example – could have great impacts on its climate goals:
Germany is currently discussing buying incentives for new cars with not only electric, but even old combustion engines. Moreover, the auto industry lobby is even demanding to relax CO2 targets for cars until the businesses are back on their feet.
Are we losing sight of our goal of fighting climate change? Do consumers support these negotiations of ‘postponing’ our climate goals in order to recover from this economic crisis? And how is this affecting the market of products that we as a sales agency support: Organic and sustainable products.
Millenials: Climate change will have an impact at least as bad as corona
It seems that, while environmentalists - rightfully so - worry that the crisis may push the fight against climate change off the agenda, it may have actually increased awareness of the issue - at least for some consumers.
A study of 2500 users, conducted in April 2020 by Utopia, a leading German online portal on sustainability, found that 79,1% already increasingly support local businesses and plan to do so in the future.
65.2% think they will continue to buy less things they don't necessarily need after the crisis and 46.5% expect that they will care even more about sustainability than before the crisis. Maike Gebhard, CEO of the portal and an environmental economists adds that especially young people - mainly in the age group between 18 and 34 - are aware that climate change will an impact at least as bad as Corona and want to make changes now and not wait until it’s too late.
They are tired of business as usual, share a 'less is more'-attitude, are willing to do without certain products for ethical or ecological reasons and spend more money for sustainable products. She expects that this group of sustainability-aware consumers will have a big impact on the market in the near future.
Consumers will expect ‘more’ from businesses
A study of Mc Kinsey and German Marketing agency Jung von Matt confirms this and emphasises that consumer behaviour will likely have changed after this crisis: People are becoming more and more critical and expect businesses to act responsibly – in response to this current situation and in general. They are doing their research before buying certain products, and gather more information about the company, such as production methods and supply chains.
Also a company's identity will become more important: ‘What's your purpose and why should we buy your products?’, are questions that businesses should prepare themselves to answer.
Concluding, it can be said that people are not willing to simply forget about our environment in order to stimulate the economy. In a study of 5000 people, the polling institute Civey found that 61,8% of Germans are against the discussed car incentives. For a nation that relies heavily on its car industry, this is quite a statement. We are curious to see how this will evolve in the following months and which decisions politicians will take.