Most Canadians are skeptical about companies’ sustainability claims

While brands think they have consumer trust, most Canadians are skeptical about sustainability claims; according to a Deloitte Canada report, there is an opportunity for brands to build transparency with authenticity, clarity, and purpose

New York, NY (July 6, 2023) – Deloitte Canada’s latest report, Creating value from sustainable products: How business purpose and brand trust can make the difference, reveals a substantial disconnect between how brands and consumers regard sustainability claims and products. Companies gain an advantage by closing the perception gap and validating those claims.

According to the survey, 57 per cent of Canadian consumers do not believe most green claims brands make. Consumers are confused and frustrated by the proliferation of sustainability claims, while business leaders think the public has a significant (71 per cent) or moderate level of trust in the authenticity of those claims.

“Companies are falling into a false sense of security, believing that if they just produce a seemingly better product and bring any sustainability claim to it, it’s going to do well,” explains Joe Solly, Partner, Risk Advisory, Ontario Leader for Sustainability and Climate Change, Deloitte Canada. “What’s missing is the strategic thinking behind the product’s creation. Embedding purpose as part of the entire value chain can have a lasting and powerful impact on brands. Those that dive deeper into understanding their consumers and the values that motivate purchase behaviours will get ahead with truly sustainable products and won’t be accused of greenwashing.”

The report shows forty-one per cent of businesses underestimate the risks of greenwashing accusations if they pursue sustainability goals. Business leaders surveyed seem largely unconcerned or unaware of how consumers perceive their sustainable product or the potential impacts that accusations of greenwashing could have on their brand.

Meanwhile, nearly half of consumers (46 per cent) are not willing to pay extra for sustainable products, stating it is hard to identify those that are genuinely sustainable. Consumers are more likely to purchase a product if it is truly sustainable but need more information to help them make that decision. Almost all surveyed (94 per cent) believe it is a brand’s responsibility to create green products, and they want companies to make sustainability integral to their business and purpose.

“It starts with a commitment by leadership, and a holistically integrated approach to sustainable practices, from design, supply, manufacturing, transportation, and all the way to marketing,” adds Solly. “This is how brands can build consumer trust and strengthen the case that sustainable products are indeed the better choice and offer the highest value. With more rigorous regulations about sustainability claims on the horizon, businesses need to ensure they can back up what they are they’re telling consumers.”

Purpose-led companies can generate trust, goodwill, and momentum among customers. By committing to established, third-party certifications and working relentlessly to communicate the advancement of sustainability goals, brands can close the trust gap and achieve business success.

The report also shows almost two-thirds of Canadian companies have considered developing sustainable products or services. Of those that went on to develop one, 62 per cent feel that research and development was too costly.

As for businesses that are not considering developing sustainable products, they point to a lack of consumer demand and concerns about being able to communicate authentically – despite recent examples of clothing retailers and consumer goods companies taking reputational hits over false or misleading claims.

Read the full report.

About Deloitte

Deloitte provides audit and assurance, consulting, financial advisory, risk advisory, tax, and related services to public and private clients spanning multiple industries. Deloitte serves four out of five Fortune Global 500® companies through a globally connected network of member firms in more than 150 countries and territories bringing world-class capabilities, insights, and services to address clients’ most complex business challenges. Deloitte LLP, an Ontario limited liability partnership, is a Canadian member firm of Deloitte Touche Tohmatsu Limited.

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SOURCE: Deloitte

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