The green divide: how China and the West differ on sustainability

Does “sustainability” mean the same in China as it does in the West? According to Deloitte’s latest study, “The ‘Sustainability’ Difference between China and the West from Consumers' Perspective,” this question eludes a simple answer. This complexity isn’t surprising, given the rich history of sustainability thought in China, predating the introduction of Environmental, Social, and Governance (ESG) concepts by millennia. For instance, a passage in the Analects (c. 50 BC) notes that “Confucius fished, but never with a net; he shot, but not at a roosting bird,” becoming an example of early sustainable thought in China. In modern China, the importance of sustainability has only grown, especially following the country’s ambitious carbon reduction goals set in 2020. As China positions itself to become the world’s largest consumer goods market, the impact of sustainability on industry dynamics is undeniable. Yet, it is perhaps inevitable that Chinese consumers display a strong awareness of the importance of sustainability and caring for the environment. As Dr. Christina Dean, Founder and CEO of the R Collective and founder and Chair of Redress, puts it, “Consumers in emerging markets care more about the environment than Western consumers. And the obviousness of that is because of their proximity to production and to environmental issues.” Conceptions and behavior Deloitte’s study found that Chinese and Western consumers diverge in their conceptions of sustainability insomuch as the former tend to focus on environmental aspects like the conservation of natural resources and recycling efforts, while the latter include not only environmental concerns, but also social and governance issues, emphasizing human rights and ethical work practices. Despite these differences, there’s common ground between Chinese and Western consumers in their concern for sustainable packaging, reducing carbon emissions, and cutting down waste in production processes. Sustainable behaviors among consumers in China and the West show distinct patterns, reflecting deeper cultural and environmental understandings of sustainability. Over 70% of Chinese consumers not only recognize the importance of sustainability, but also engage in behaviors that support it, such as opting for restaurant takeout with eco-friendly packaging, or preferring modes of transportation with lower carbon footprints. Western consumers, meanwhile, tend to focus their sustainable efforts on lifestyle choices like selecting sustainably made clothing, footwear, and home goods. These variations highlight the influence of different societal norms and environmental awareness levels on consumers’ sustainability practices in the East and West. Behavioral insights What actually defines a sustainable product? According to Deloitte’s study, Chinese and Western consumers give similar responses, adhering broadly to the Three Rs (reduce, reuse, recycle). Other valued attributes include the capacity to lower carbon footprints and bolster biodiversity. Notably, Chinese shoppers place a higher emphasis on a product’s sustainable qualities during their purchasing process, often viewing these attributes as crucial in their decision-making. The utility and longevity of a product, including its durability and ease of repair, significantly influence the purchasing decisions of consumers from both regions, as these aspects promote a more cost-effective and sustainable way of living by reducing the need for frequent replacements. Moreover, Chinese buyers show a particular interest in the trustworthiness and certification of product sources, with a significant number more likely than their Western counterparts to prioritize products that are responsibly sourced or labeled as such. Despite a general focus on environmental aspects of sustainability among Chinese consumers, there is a growing recognition of and appreciation for the social and governance dimensions of sustainability. This is reflected in data indicating that a notable portion of Chinese consumers equates sustainability with socially responsible practices, such as fair labor policies, and places considerable value on these attributes when selecting sustainable products. Views on ESG Influenced by the global shift towards sustainability, Chinese consumers have begun to embrace sustainable principles and engage in corresponding behaviors. The understanding and application of these principles vary across generations, shaped by their unique life experiences. Gen X and Gen Y, shaped by traditional values, approach sustainability with a pragmatic and conservative mindset. In contrast, Gen Z consumers, who grew up amid the digital information and technology boom, place a higher value on personal experiences and the emotional resonance of sustainability. They are more inclined to pay extra for products that not only embody sustainable practices, but also resonate with their personal values and offer quality. Across all age groups, there’s a consensus on the importance of conserving resources and minimizing waste, with over 60% of consumers recognizing its significance. Different generations focus on varying aspects of sustainability, reflecting the diversity of their upbringing and access to information. The older generations, Gen X and millennials, influenced by a more traditional upbringing, prioritize the environmental and ecological aspects of sustainability, guided by a logical and analytical approach. Meanwhile, Generation Z, nurtured in an era dominated by social media and rapid technological advancements, is more receptive to new concepts and values the unique and personal experiences that sustainable practices offer. This younger generation is particularly drawn to the emotional appeal and individual expression that comes with adopting sustainability in their lifestyle. Interestingly, Deloitte finds that young Chinese consumers tend to trust companies actively engaging in sustainable practices. Yet, the report does not delve as deeply into claims of product safety among brands looking to attract sustainability-minded consumers, particularly in China. “We’ve known for a long time that sort of safety claims are very important, so I would say traceability, transparency, and greenwashing are continued concerns,” says Christina Dean, adding that this trickles back to the importance of governance – the “G” in ESG. Sustainability trailblazers Deloitte’s report highlights successful sustainability endeavors within China’s consumer goods sector, led by SIG Group, L'Oréal, and Saturnbird. According to Deloitte, packaging solutions provider SIG Group is a key innovator, emphasizing its commitment to sustainability through the development of low-carbon packaging and active participation in recycling initiatives. Its Terra Alu-free packaging represents a significant step forward in reducing the carbon footprint of packaging materials, showcasing how technological innovation can meet sustainability goals while also helping client brands achieve their environmental objectives. Meanwhile, multinational beauty group L’Oréal has taken a holistic approach to sustainability, encompassing everything from product innovation and green e-commerce logistics to comprehensive carbon-neutral supply chain management. The brand’s active engagement in promoting green consumption and its collaborations on recycling and sustainable packaging underscore the potential for established brands to lead by example, driving industry-wide shifts towards more sustainable practices. Deloitte also applauds emerging Chinese coffee brand Saturnbird for its innovative approach to sustainability, particularly through its "Project Return" initiative, which is aimed at recycling coffee cups. Coupled with Saturnbird’s Afteresso coffee grounds recycling system, the company’s comprehensive environmental effort highlights the brand's ability to engage consumers in sustainable practices, fostering a community of environmentally conscious users. Secondhand items: a key divergence One notable finding in Deloitte’s study is that Chinese and Western consumers buy distinctly different second-hand products. Due to the widespread availability of secondhand electrical appliances and electronics platforms in China, Chinese consumers tend to purchase those items at a higher rate than their Western counterparts, while consumers in the UK purchase significantly more secondhand footwear, clothing, and furniture. However, as Dean of Redress points out, this disparity is less to do with demand or interest and more to do with availability. “What I would argue is it’s access to secondhand, pre-loved clothing. In the UK, you've got charity shops all over the place, secondhand [stores], so there is a market discussion around accessibility,” says Dean. Deloitte’s finding of a massive disparity between consumer purchases of secondhand footwear and apparel in China and the UK fails to paint a nuanced picture of demand in more developed secondhand markets. Dean calls attention to the evolution of Hong Kong’s secondhand fashion market, noting that Redress has held secondhand clothing pop-ups in the city for 15 years. “Over those 15 years, we have seen a marked shift in consumers who are buying secondhand clothes, with a huge increase in locals,” says Dean. “I could categorically say that there is demand.” Similar pain points Notably, Deloitte points to the affordability of sustainable products as a common pain point for Chinese and Western consumers. More than 55% of both Chinese and Western consumers consider sustainable products and services to be overly costly, while over half of Chinese consumers report a lack of sufficient information about sustainable products and services as a significant issue. In the UK, 60% of consumers point out that prevailing economic uncertainties significantly influence their decisions to purchase sustainable products. In general terms, the key finding is that economic uncertainties dampen consumer enthusiasm for spending, leading to a cautious approach towards purchasing sustainable products. In China, the struggle is compounded by a scarcity of accessible information on sustainability, which hinders consumers’ ability to make informed decisions about sustainable consumption. Towards a more sustainable horizon As the global emphasis on sustainable development intensifies alongside China’s commitment to achieving its “dual carbon” objectives, the comprehension and implementation of sustainable practices among Chinese consumers are growing fast. This trend is particularly pronounced among young consumers, who show a preference for brands that demonstrate active involvement in sustainability, express their readiness to engage in social sustainability initiatives, and even are willing to pay a premium for products that embody sustainable values and offer emotional resonance. Recognizing this shift, Deloitte highlights the necessity for consumer goods companies to tap into the underlying motivations driving sustainable consumption, urging an approach that aligns with China’s specific market dynamics, consumer preferences, and industry characteristics. By focusing on brand enhancement, product innovation, and the delivery of emotional value, companies can amplify their sustainable appeal. Firms that proactively integrate sustainability into their supply chains, product offerings, and marketing strategies are poised to capture emerging market opportunities, with Deloitte advocating for both multinational and domestic companies to leverage sustainability as a catalyst for fostering new growth and contributing to a greener future.

The green divide: how China and the West differ on sustainability

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Published March 14, 2024

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The green divide: how China and the West differ on sustainability