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Generation Z loves sustainable business! 


Annika Konttinen

lehtori, matkailuliiketoiminta
Senior Lecturer, tourism business
Haaga-Helia ammattikorkeakoulu

Julkaistu : 21.03.2019

Sustainability is a driving force in all businesses. When researching* sustainability and pricing, one concept comes up over and over again: the willingness to pay. According to market research by Nielsen, 66 % of global consumers say they are willing to pay more for sustainable products.

Are the consumer really prepared to pay for sustainability? As we know, there may be an attitude-behaviour gap – many people say they would, but in the end, price is the deciding factor. On the other hand, some groups of consumers are more willing to pay more for sustainability than others. For service providers it is important to know who they are. Obviously, sustainability activists, a niche market, are always willing to pay more for services that align with their values. More remarkably, there are generations that are more willing than others to pay for sustainability.

We all know that the Millennials are the ones who even choose their employers based on their CSR programme, so they definitely. But the generation that comes after them, the young Gen Z, even more so.

Sustainability as a competitive advantage

In fact, teenagers and young adults in their early 20s, the generation Z, love sustainability. Social responsibility and environmental awareness are high on their value agenda. They prefer to buy from companies that do good for the environment, economy and society around them.

Companies with strong sustainability programmes have a chance to increase customer loyalty and market share with generation Z. In order to attract the sustainability loving Gen Z consumers, it is important that companies communicate what they do on the sustainability front. Being able to communicate about sustainability deeds and achievements as well as talk about the issues that the customers care most about can be a competitive advantage.

Gen Z has a sustainability spokesperson already

Generation Z has found a very powerful voice in the Swedish teenager Greta Thunberg who has inspired students around the world to take part in climate strikes every Friday. She has met world leaders at high profile climate and business conferences, most recently at the annual World Economic Forum in Davos in January 2019 where she told the most powerful political and business leaders of the world that their lifestyle was making the world sick (as the leaders had arrived to the conference by private jets). She made an urgent call for action by saying that we are already in the middle of the biggest crisis in human history and the time to act is right now: “Until you start focusing on what needs to be done rather than what is politically possible, there is no hope. We cannot solve a crisis without treating it as a crisis.” Greta herself does what she preaches: She has become a vegan and does not travel by plane anymore.

The Gen Z has followed Greta’s example. In countries across the globe, students have skipped classes and joined her powerful protest movement. As the original digital natives, generation Z is accustomed to embracing the power of social media. Their message can be heard by a global audience. With their increasing purchasing power, their choices can make or break businesses. There have already been successful campaigns, such as those against plastic bags and straws that have changed the business practices of multinational companies and cities. Many companies have hired generation Z employees to become more savvy in the ways to communicate with the sustainability loving generation.

Gen Z raising its voice and walking the talk

If all products had all the costs that they impact on the environment, economy and society included in them, the prices would certainly be a lot different than what we have today. We have probably all heard how insanely much water goes into one cup of coffee or to making a t-shirt. We have outsourced much of our industrial production to water scarce destinations where the pay and working conditions for locals are minimal, too. What if the needs of generation Z would influence our decision-makers and companies to start acting more responsibly?

Governments can influence thorough legislation, taxes and incentives, companies by introducing more sustainable pricing strategies. But perhaps the group that has the most power are the consumers. Generation Z is raising its voice and becoming a powerful consumer group. There is still hope.

*This article was inspired by the TOURIST project training in Thailand earlier this year. Our topic in the training was Sustainability and Pricing. The TOURIST project aims to create competence centres for the development of sustainable tourism and innovative financial management strategies to increase the positive impact of local tourism in Thailand and Vietnam.