For many years, executives have been sold on a compelling idea: that doing well also means doing well. Surveys indicate that consumers are increasingly willing to pay more for products that are perceived (or marketed) as better for the planet. Advisors reinforced the message. Investors rewarded ambitious environmental commitments. Companies have launched wave after wave of sustainable products, expecting customers to reward their efforts at the checkout counter.
Research seems to justify this confidence. In 2020, consulting firm Kearney reported this 70% of consumers They said they were willing to pay up to 10 percent more for sustainable products. Another consulting firm, Bain, surveyed more than 23,000 consumers in eleven countries in 2023 and found that 64% reported high levels of anxiety About sustainability. McKinsey went further, declaring that consumers not only care about sustainability, they care about it Support those concerns With their wallets.
The problem is that they weren’t. When McKinsey tested willingness to pay using an auction-based methodology, consumers were willing to pay The average premium is only 2.2 percent To achieve sustainability through three everyday products: yoghurt, shampoo and t-shirts. Likewise, a study by European e-commerce company Zalando, which surveyed 2,500 consumers, found that while 60% said sustainability transparency was important to them, only 20% actively sought that information During the purchasing process. This is what researchers call the word-action gap: the distance between what people tell pollsters and what they actually do in stores.
This gap reflects a fundamental truth about the way people buy things: customers buy products to get a job done. No one is buying dishwasher tablets to save the planet. They do this to clean the dishes. No one buys farm equipment to reduce carbon emissions. They want to run a more productive farm. Sustainability may be a A reason to carebut rarely a Reason to buy. The two are not the same thing, and confusing them has been one of the most costly strategic mistakes of the past decade.
This is the central result of Our research. But the story does not end in failure. The most interesting finding is that many of the most commercially successful sustainability strategies in recent years have quietly abandoned the premium model altogether and replaced it with something vastly more sustainable: using sustainability to improve customer outcomes.
For most of its history, John Deere sold agricultural equipment. But more recently, I’ve moved into selling farm productivity. Through precision technologies, farmers can now reduce fuel consumption, fertilizer use, and herbicide use, thus improving yields, lowering costs, and simplifying regulatory compliance at the same time. Although the environmental benefits are great, sustainability is not the motivation behind your purchase. Farmers are adopting these technologies because it helps them manage their businesses better.
This represents a fundamentally different logic from the one that has dominated thinking about sustainability for much of the past decade. The older model assumed that environmental benefits in and of themselves would create enough value to justify higher prices or, in some cases, lower performance.
John Deere’s approach does the opposite. It uses sustainability to It improves Performance, so customers get better results and automatically track environmental gains. The company doesn’t need to convince farmers to care about the planet. She must convince them that the technology works. Sustainability is not just optional; It is invisible to those who do not pay attention to it.
We encounter this same pattern over and over again. Take the ultimate dishwasher detergent. Even with the machine, washing dishes was a chore. For years, consumers have routinely pre-rinsed dishes before putting them in the dishwasher, a habit that can use up to 75 liters (19.8 gallons) of water.
Finish engineers have developed a tablet that is effective enough to eliminate the need for pre-rinsing altogether, saving customers an average of 57 liters (15.1 gallons) of water.
Electrolux offers a consumer version of the same logic. The company’s care drum, a pillow-like mechanism inside its washers, is designed to be gentler on clothes and reduce wear, helping clothes last longer. For customers, this means lower replacement costs and the ability to keep clothes they value longer.
The environmental benefits are real too, although that’s not its main selling point. Electrolux estimates that it will extend the life of clothing by just nine months Reduces emissions and waste
This is what we call resonance: leveraging sustainability for… He increases Customer value rather than simply indicating environmental commitment. Resonant companies realize something that eludes most traditional sustainability strategies: that not all customers care about sustainability, and it’s not their job to change that. What they can do is use sustainability as a lens for innovation, finding ways to improve what customers already value while reducing environmental impact. The best sustainability strategies integrate environmental gains into the outcomes customers actually want.
The same principle works in B2B markets. Schneider Electric has built much of its value proposition around helping customers reduce energy consumption and improve operational efficiency. Its clients don’t buy sustainability credentials. They buy lower costs, greater flexibility and better performance. Sustainability is the result of solving these problems. This is one reason why sustainability has become more commercially viable in industrial markets than many expected: when environmental improvement is structurally linked to economic outcomes, the challenge of commercial viability becomes extremely difficult.
The plant-based meat experience illustrates the opposite dynamic. Consumer interest in reducing meat consumption remains high. However, growth slowed sharply as many products suffered from a familiar set of challenges: rising prices, questions about taste, and concerns about the degree of processing involved.
Clients were often sympathetic to the environmental mission. They were simply less willing to compromise on the attributes that drove the original purchase decision. The lesson is not that sustainability does not matter. Sustainability is most important when it improves the things customers already value, and fails when it asks them to accept less of those things in return.
This shift may ultimately be healthy for the sustainability movement itself. For many years, the prevailing question in the business world has been: How much more will customers pay for a more responsible product? Increasingly, winning companies are demanding something more productive: How sustainability can help us create more value?
Phrasing this question in this way leads to completely different answers. It encourages companies to behave differently, focusing on eliminating waste, improving product performance, or, in some cases, reducing the cost of ownership or enhancing customer loyalty. These actions are not seen as a trade-off for sustainability, but rather as an expression of it. This new lens transforms sustainability from an added benefit into a source of competitive advantage.
This is where the next phase of sustainable business will be won or lost. The future does not belong to companies that ask their customers to choose between sustainability and economics. They belong to companies that have made sustainability the reason behind the improvement of the economy.
Clean Winners: A sustainability strategy that puts customers first by Gautam Chalagala and Frédéric d’Alsace’s book is out now, published by Harvard Business Review Press.
