Consumers: The Missing Link in a Low-Carbon Economy

Written by Martin Nyløkke Gronemann

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In recent years, there has been an increased focus on regulations to change the behavior of businesses and facilitate the transition from a fossil-fuel economy to a low-carbon economy. At the same time, many businesses have reduced operating costs by optimizing resource consumption in the production processes. These regulatory and cost-reducing initiatives are helpful, but businesses typically neglect one powerful tool: consumers.

In addition to abiding by government regulations and streamlining production, businesses have an opportunity to strengthen their top line by delivering environmentally friendly solutions tailored to the needs and behaviors of their customers.

Businesses neglect the growth potential of existing technologies

There are two main ways businesses can strengthen their top line through environmentally friendly solutions: by developing new technological solutions, and by adopting existing technologies that have already proved financially and environmentally viable.
As we see it, businesses and policymakers focus too much on technological development. A 2008 McKinsey analysis revealed that we could accomplish 70 percent of the required reductions in carbon emissions using existing technologies, with no extra long-term costs, yet customer adoption has not followed suit. Focusing on the customer-adoption side of carbon reduction will enable businesses to make better use existing technology. To do this, they need to pay closer attention to the culture of the consumer.

Consumer understanding is the key to sustainability business

There are many explanations for why some consumers get excited about environmentally friendly products while others shy away from them. As human beings, we move through various social contexts over the course of a day, and we make decisions in different ways depending on our role in each one: when we buy food for our kids, we act as parents; when we shop for running shoes, we think of ourselves as athletes; and when we weigh the pros and cons of insulating our home, we act as homeowners. To create business models and go-to-market plans that will succeed, businesses need to understand the social contexts that influence consumer decisions.

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