Greendex 2009: Consumer Choice and the Environment
- 1. Greendex 2009: Consumer Choice and the Environment – A Worldwide Tracking Survey HIGHLIGHTS REPORT May 2009
- 2. I NT RO D UC TI O N National Geographic conducted its inaugural Greendex survey in January 2008. At the time, the economy was strong, although growth was beginning to slow. Countries like India and China had recently experienced unprecedented prosperity. New wealth was being created and the middle class was growing. Meanwhile, the environment had recently been polling at unprecedented levels as an issue of public concern. Climate change and global warming had become household concepts as consumers’ knowledge improved. That first Greendex survey of 14 countries around the world ranked average consumers in those countries according to the environmental sustainability of their behavior. Consumers in the large developing economies of Brazil, India and China scored highest, while Canadians and Americans, with their relatively massive environmental footprints, scored lowest. The 2008 findings raised concerns about what economic development and the material aspirations that come with it would mean for the impact that the average consumer in rapidly developing countries has on the environment. At the same time, the results reminded us that consumers in wealthy countries have a proportionately greater impact on the environment than others— and that they can and should make more sustainable choices. The world has changed since January 2008. Following what was an extremely volatile year by many measures, National Geographic replicated its Greendex survey in January 2009. How has consumer behavior changed from one year ago? And if it has changed, why? In what environmental direction are we headed? The following is an interpretive summary of Greendex 2009: Consumer Choice and the Environment—A Worldwide Tracking Survey. 2
- 3. The Greendex is a comprehensive measure of consumer behavior in 65 areas relating to housing, transportation, food and consumer goods. Greendex 2009 ranks average consumers in 17 countries—up from 14 in 2008 for which changes are tracked—according to the environmental impact of their discretionary and nondiscretionary consumption patterns within these four major categories. Each respondent earned a score reflecting the environmental impact of his or her consumption patterns within each, and four corresponding “sub-indices” were created. Consumers were then assigned an overall Greendex score (a measure of the relative environmental sustainability of their consumption patterns) out of 100, based on their performance within the four sub-indices. G RE E NDE X 2 00 9: O V E RALL R E S U LT S In their second annual survey to measure and monitor consumer behaviors that have an impact on the environment, the National Geographic Society and the international polling firm GlobeScan have found an increase in environmentally friendly consumer behavior in 13 of the 14 countries that were surveyed in both 2008 and 2009. Consumption as measured by the Greendex is determined both by the choices consumers actively make — such as repairing rather than replacing items, using cold water to wash laundry, choosing green products rather than environmentally unfriendly ones — and choices that are controlled more by their circumstances — such as the climate they live in or the availability of green products or public transport. The research considers both of these types of factors, with 60 percent of the 65-variable index based on choice or discretionary behavior. As seen last year, the top-scoring consumers of 2009 are in the developing economies of India, Brazil and China. Argentina and South Korea, both new additions to the survey, are virtually tied for fourth, followed by Mexicans, Hungarians and Russians. Ranks ninth through thirteenth, the latter a three-way tie, are all occupied by Europeans, as well as Australians in twelfth. Japanese, U.S. and Canadian consumers again score lowest. 3
- 4. Much of the increase in the overall 2009 Greendex scores was due to higher scores within the category of housing, where the index measures the energy and resources consumed by people’s homes. Changes within the categories of personal transportation, food and consumer goods were mixed, with some up and some down. Findings within each of these four categories are described in more detail below. First conducted in 2008, the Greendex survey was expanded in 2009, with the addition of Argentina, South Korea and Sweden to Australia, Brazil, Canada, China, France, Germany, Great Britain, Hungary, India, Japan, Mexico, Russia, Spain and the United States. Seventeen thousand consumers were polled online (1,000 in each country), answering questions that measured their behavior in the areas of housing, transportation, food and consumption of goods. An examination of the degree of change in Greendex scores reveals some interesting clusters of countries. Consumers registering the best year- on-year improvement in environmentally sustainable consumer behavior are the Spanish, Germans, French and Australians, while Russians and Mexicans show the smallest increase. Brazilians are the only consumers measured in 2008 and 2009 to show a decrease in their Greendex score. The results suggest that both cost considerations and environmental concerns may have motivated consumers to adopt more environmentally sustainable behavior over the past year, hence the general increase in Greendex scores. The 2009 Greendex survey has identified a number of types of environmentally friendly behavior that have become more common, and many of these result in cost savings for consumers. For example consumers in 11 of the 14 countries surveyed in 2008 and 2009 are more likely this year to report that they keep their heating and cooling settings in their households lower to save energy. The practice of washing laundry in cold water rather than hot to save energy has also become more widespread in nine countries surveyed in both years. Preference for buying second-hand rather than new household items has become more widespread, as has as the preference for repairing broken items to extend their useful lives. 4
- 5. The survey asked consumers whether they had reduced the consumption of energy in their homes over the past year, and whether they reduced the amount of fuel they consumed in their motorized vehicles. In both cases, those who said that they had reduced energy and fuel consumption were asked why. Cost is by far the most frequent explanation offered for the reduction, with between eight and nine in ten consumers selecting cost as one of their top two reasons. In comparison, between three and four in ten say that their environmental concerns were one of the top two motives for the reduction. It appears, then, that cost was an important factor behind this year’s increase in consumers’ Greendex scores. Given the current recession, this interpretation is all the more credible. But, concern about the environment likely played a role as well. At the beginning of 2008, environmental concern and engagement among the public was higher than it perhaps had ever been, and many programs and initiatives by governments and companies were put in place as a result. The severity of the economic slowdown was not yet fully yet anticipated. While the economy is by far the most top-of-mind national issue measured on our 2009 survey, overall concern about the environment is down only slightly from a year earlier. 5
- 6. This environmental concern is reflected in consumer behavior. For example, the percentage of consumers who say they buy certain products specifically because they are better for the environment than other products, an action unlikely to consistently result in savings to the consumer, increased in five countries in 2009, and decreased in only one. Air pollution, climate change/global warming and water pollution rank fourth through sixth on a list of 12 global concerns, just behind the economy, fuel costs and poverty. Roughly two-thirds of consumers say they are concerned about each of these environmental issues. Six in 10 consumers across the 17 surveyed countries agree that people need to consume less in order to improve the environment for future generations (only 12 percent disagree), showing that consumers recognize the connection between their actions and the environment. The notion of reinforcing co-benefits is perhaps a useful one when weighing the relative impact of the economy and environmental concerns on consumer behavior. Consumers increasingly realize that they can save money and help the environment at the same time, and they want to do both. However, Brazilians, Russians and Mexicans, who increased their Greendex score from 2008 the least, share a number of characteristics that may discourage green consumer behavior. Consumers in these countries are more likely than others to believe that environmental problems are so severe that there is little they, as individuals, can do about them. In other words, they lack a feeling of empowerment when it comes to the environment. This belief has grown in all three of these countries since 2008, yet it has decreased in Germany, where Greendex scores have improved more than in other countries. HO USI NG The housing sub-index measures things like the size of one’s residence relative to the number of inhabitants, home heating and cooling, retrofits that increase efficiency, the purchase of renewable energy, the use of energy-efficient major appliances, and water usage. In all, the sub-index includes 24 different variables. 6
- 7. Consumers in all surveyed countries registered significant improvements in their 2009 housing scores, accounting for a large portion of the increases in the overall Greendex scores. Brazilians, Indians and Mexicans again top this sub-index, as they did in 2008. Countries in which the average consumer’s housing score improved most notably are India, China, Mexico, Spain and France. U.S. consumers, who earned the lowest housing scores, also improved from 2008, but by a smaller margin than all other consumers surveyed. British and Japanese consumers also exhibit such a pattern. People in developing countries score higher in this area in part because they generally have smaller residences and use less energy in their homes, often not needing home heating. This year’s survey found that since 2008, consumers across many countries are now more likely to engage in energy-saving activities, such as adjusting thermostat settings (up in 11 countries), minimizing their use of fresh water (up in nine countries), and washing laundry in cold water to save energy (up in nine countries). This is due to both cost and environmental considerations. For example, when the three in ten consumers who say they reduced their consumption of energy for heating or cooling their homes over the past year are asked why they did so, eight in ten say that cost was one of the top two reasons. Four in ten say that their environmental concerns were behind the change in behavior. Thus, regardless of the motivation, some consumer behavior as measured by the Greendex survey has shifted in ways that benefit the environment. Another factor behind the increase in Greendex scores is the increase in ownership of energy efficient appliances, as some consumers have replaced their older, less efficient units with newer, often more efficient ones. Televisions are a good example, with more efficient LCD or plasma screens becoming more common. The percentage of consumers reporting that their household contains an efficient television is up in seven countries from last year, and by five points overall. This and other examples represent cases where industry has provided consumers with products that help them reduce their environmental footprint, and consumers have enthusiastically embraced them. 7
- 8. Brazilians continue to be much more likely than other consumers to purchase renewable or “green” electricity (Brazil has invested heavily in energy production from biomass), and this year consumers in two other emerging economies, India and Mexico, have shown increases in “green” electricity purchases. Argentineans, Russians and Mexicans are the most likely to report installing energy-saving appliances in the past year. Canadians, Russians and Argentineans are more likely than others to have sealed drafts in their homes, installed thermal windows, or installed or upgraded insulation this past year. TRAN S P O RT A TI O N The transportation sub-index measures things like the ownership and driving of motorized vehicles, including their size as an approximation of fuel efficiency, the frequency of air travel, the use of public transportation and trains, as well as the frequency of walking or cycling as one’s primary means of transportation. In all, 17 variables are included in the transportation sub-index. Overall, scores are flat or down on this sub-index from last year. Consumers who show the biggest drop in transportation scores live in India, Brazil, China, Mexico, Russia, Canada and the United States. Despite this drop, Chinese consumers scored highest overall in the transportation sub-index, followed by Argentineans and Indians. Greendex transportation scores fell less (or remained essentially level) in Spain, Australia, Germany and Britain. Australians, Canadians and Americans again occupy the bottom of the ranking this year. Transportation-related behavior is generally more environmentally friendly in developing countries where consumers tend more than others to walk, cycle or use public transportation, or choose to live close to their most common destination. Russians, Chinese and South Koreans are most likely to use public transportation regularly, while Australians, Canadians and especially Americans are the least likely to say that they do. Despite their generally more environmentally friendly transportation behaviors, consumers in developing countries saw the sharpest decline in 2009, perhaps as a result of peak prosperity in early to mid-2008. In China, for example, car ownership is less common than in other 8
- 9. countries, but it is increasing. Further, fewer Chinese this year than last report walking or riding a bike frequently to their most common destinations. When asked whether they intend to acquire a new or used motorized vehicle in the coming year, Indians, Brazilians, Mexicans and Chinese, in that order, are the most likely to say they probably will. When asked to reflect on the past year, many consumers report that they decreased their vehicle fuel consumption. When asked why, most (seven in ten) say that cost was one of their top two reasons. Three in ten say that their environmental concern was one of the main reasons for their decreased fuel consumption. Among motorized vehicle drivers only, between three and eight in 10 across the countries surveyed agree that increased fuel prices caused at least a temporary change in their transportation habits. Among U.S. drivers who say they changed their transportation habits because of higher fuel prices, 85 percent say they have reduced how much they drive. Among Chinese consumers who say they have changed their transportation habits due to fuel prices, 85 percent say they have increased the amount they bike or walk. However, among all consumers surveyed in China, the percentage who walk or bike 9
- 10. frequently appears to be down from last year. Asked why they do not take public transportation more often, consumers most often cite availability and efficiency as the reasons. Additionally, Indian and Russian consumers claim public transportation is too crowded, Japanese attribute low usage of public transit to high cost and Mexican consumers point to safety considerations. Of all the four sub-indices, the 2009 transportation sub-index reveals the least progress from 2008, with scores in fact level or down. Transportation practices may indeed be the most difficult for individual consumers to alter, with few available alternatives to what their infrastructures offer. FO O D The food index comprises eight variables including the frequency of consumption of locally produced foods, foods grown or raised by oneself, fruits and vegetables, beef, chicken, seafood and bottled water. Organic foods are not included in this sub-index due to high variability in the definition and understanding of “organic” from country to country and dispute about whether organic foods shipped a long distance are environmentally superior to locally produced conventional foods. Indians, Australians and South Koreans top this index this year, although Indian consumers’ score has dropped from last year. Countries in which the average consumer’s food score improved the most are Germany, Australia and the United States; those whose consumers’ scores dropped the most are India, Brazil and Hungary. Since 2008, consumers in seven surveyed countries, the United States, Australia, Great Britain, France, Japan, Mexico and Russia, decreased their consumption of bottled water—suggesting that awareness of the environmental issues associated with bottled water consumption issues has increased. Swedes, at just 6 percent, are the least likely to drink bottled water every day. Germans remain the most likely to drink bottled water — 68 percent do so daily. Indian consumers report eating fewer local foods and fruits and vegetables in 2009 than they did in 2008, and increased consumption of imported foods and bottled water. However, their 10
- 11. Greendex score is bolstered by the fact they eat the least amount of meat and seafood. Consumers in most other countries tend to consume both meat and seafood at least once a week. Americans, British, Germans and Spanish are more likely now than a year ago to consume locally grown foods several times a week or more. This finding perhaps reflects a growing consciousness about food origins, manifested by trends such as the “one-hundred mile diet.” Brazilians and Indians are less likely than last year to eat locally grown foods. Argentineans are the most common eaters of beef, with 66 percent saying they eat it several times a week compared with 8 percent of South Koreans or Hungarians. Mexicans have increased their beef consumption this year; 48 percent say they eat it several times a week compared with 39 percent last year. Ninety percent of Japanese eat fish or seafood at least weekly; just 34 percent of Indians and 25 percent of Hungarians do. G OO DS The goods sub-index measures a mix of everyday consumption habits and preferences, as well as the number of “big- ticket” items included within one’s household, relative to the number of people who live there. Specifically, the index includes the purchase and/or avoidance of specific products for environmental reasons, the preference for reusable consumer goods over disposable products, willingness to pay an environmental premium, recycling practices, and the number of large appliances within one’s household, among other things. All told, the goods sub-index is made up of 16 individual variables. 11
- 12. Topping this sub-index this year are Indians, South Koreans and Chinese. The biggest year-on- year improvement was recorded by Indians, Russians and French, while Brazilians recorded the biggest drop. The score for the average Chinese consumer also decreased more than for most others. Avoidance of environmentally unfriendly products, a choice that is not necessarily motivated by cost savings, is up among consumers in six countries. Indians, Brazilians and Mexicans show the biggest year- on-year increase in this area. These consumers, along with Chinese, also are the most likely to say they buy environmentally friendly products. Americans, Hungarians, British, Spanish and Japanese are least likely to do so. However, the percentage of consumers who say they choose environmentally friendly products over others has increased in five countries and has decreased in just one (Russia). Consumers in South Korea, Australia, Canada, the United States and many of the European countries surveyed report a decrease in consumption of everyday household goods over the past year. While seven in 10 of those who have reduced consumption of household goods cite cost as one of their main reasons, one-third say environmental concerns were their primary motivating factor. The frequency of recycling has substantially increased in nine of the 14 tracking countries this year, perhaps as result of expanding availability and consumer participation. Consumers in developed countries such as Australia, Canada, France, Germany, Great Britain, and Spain tend to recycle most often. South Koreans and Russians are the least likely to recycle. Since 2008, the number of consumers who prefer to repair broken items rather than buy new ones has risen in six of the countries, including Canada and the United States, and in emerging economies such as Brazil, China and Mexico. There has also been a rise in the number of consumers who prefer to buy second-hand items rather than new replacements. This increase is observed in nearly half the countries surveyed and is another example of where cost savings and environmental considerations reinforce each other. 12
- 13. The French remain the most likely to use their own shopping bags, with this behavior up among consumers in 12 of 14 countries where this question was asked last year. The figure is up particularly sharply in China, where free plastic shopping bags were banned at the beginning of 2008, after that year’s Greendex survey was complete—a clear case in which regulation can result in widespread change in consumer behavior. Nearly four times as many Chinese reported using their own shopping bags this year as last. Russians and Americans report the lowest use of their own bags, at one-third each. Swedes are the least likely to prefer disposable household products over reusable items, while Indians, Argentineans, Mexicans and Brazilians say they are most likely to prefer disposable products. CO NCL US IO N Overall, Greendex scores are up from 2008. This is good news. Many will ask the question of whether this is not due to the economic downturn alone. The answer to that question has to be no. Clearly, economic conditions have reined in consumption levels, and that is reflected in the increased Greendex scores. At the same time, however, environmental concerns have remained strong, and awareness of the issues at hand has increased. Consumers have been alerted to what they can do easily, and with cost savings as the needed incentive, they have made choices to do so more than they did during 2008. 13
- 14. What will happen as the next phase of economic growth, the expansion of the middle class and increased prosperity ensue? Many, especially those in the rapidly developing countries, still aspire to a large home or a nice car. The survey results prove it. The challenge remains to ensure that what we all want is good for us and for future generations, and the priority for industry and government must be to ensure that it is provided. The environmentally positive choices that consumers have made so far have been the easy ones. They have not given up their cars, nor relocated their homes to lessen the impact of their commute to work. The changes have not required a tradeoff of cost or convenience. The message to those that supply the products and services that they consume, and to those that make the rules about how they behave, is a clear one: Make the right thing, provide the right opportunities, and consumers will do the right thing. DI S CO VE R Y O UR G R E E NDE X S CO R E Individuals around the world can find out where they rank on the Greendex scale by visiting nationalgeographic.com/greendex and taking an abbreviated survey. They can also examine the Greendex survey results by country, measure their knowledge of some basic green issues against what others around the world know and get tips on living a more environmentally friendly lifestyle. 14