Economic uncertainty puts pressure on sustainable behavior change

The transition also needs to be equitable, which means ensuring everyone—not just affluent consumers or well-paid workers—are brought along. Deloitte analysis indicates that 800 million jobs globally could be vulnerable to unchecked climate change.⁷ If those workers, many of whom likely fall in the lower- and middle-income categories, aren’t provided needed skills and a promising vision of the future or resources to adapt to a hotter, more volatile climate, we could see resistance and an inequitable transformation. Helping to ensure those workers have a voice with employers and governments as the transition unfolds is likely to be essential.

Sustainable behaviors dip amid challenges

Deloitte surveyed representative samples from more than 20 countries in September 2021, March and September 2022, and March 2023, asking about attitudes and actions related to climate change and sustainability.¹² Across those surveys, most measures of sustainable behavior have declined over time, as have the number of respondents expressing concerns about climate change. As people were buffeted by economic and political events, in most sample countries fewer people reported feeling anxious or worried about climate change recently. The percentage of respondents saying they had changed their personal activities to address climate change fell from 65% to 53% between September 2021 and March 2023. Fewer respondents reported feeling anxious or worried about climate change recently as well, dipping from 57% to 43% over the same period.

Given the challenges of the last eighteen months, particularly to many people’s financial circumstances, such a slump in attitudes is likely to be expected. Previous research has singled out economic disruption, particularly labor market disruption, as an important factor in explaining softening climate change sentiment.¹³

Yet there are reasons for cautious optimism. Despite headwinds, we continue to see large numbers of respondents—majorities in many of the surveyed countries—whose concerns about climate change and willingness to do something about it are unwavering. More than two-thirds of respondents believe climate change is an emergency, a number that has remained relatively steady over the last eighteen months. Climate consciousness should be expected to wax and wane as households grapple with emerging challenges and trade-offs. But make no mistake: it is no fad, and we do not see a cratering of support for climate action. Whether you’re a leader of business or government, large numbers of your customers, workers, and constituents are prioritizing environmental considerations, even in the face of numerous uncertainties.

Financial circumstances shape sustainable actions far beyond the “green premium”

Because people are multifaceted, there can be inherent tensions and trade-offs in the lives of even the most sustainability-minded among us. To better understand the individual and collective roles that people play in addressing climate change and sustainability, we asked respondents to Deloitte’s Global State of the Consumer Tracker¹⁴ about how sustainability factored into three dimensions of their lives: in their personal choices, their civic participation, and in their workplace.¹⁵

We addressed three main spheres—home, workplace, and community—in sets of questions around personal choices, workplace concerns, and citizen actions, as described below.

• Personal choices cover matters that are more directly under respondents’ individual control as part of their daily habits and purchasing decisions. These questions related to a variety of sustainability actions, such as: Do they recycle or compost? Have they taken measures to reduce energy usage or get their energy from renewable sources? Have they walked or cycled rather than use a personal car? Have they considered, or bought, an electric vehicle (EV)? Do they try to buy more locally, avoid or consume less meat, or choose more sustainable products?
• Workplace concerns relate to how engaged respondents are in sustainability at their jobs. We asked questions about their expectations of their employer’s sustainability actions, how a potential employer’s position on sustainability would factor into their decision to accept a job, and if they would consider changing jobs to work for a more sustainable company.
• Citizen actions offer a snapshot of how respondents are engaging in civic activities, such as their preference for a candidate that supports climate change actions, support for regulations aimed at climate protection, participation in climate protests or demonstrations, and whether they have talked to public officials or their friends and family about climate change and the environment.

We asked these and additional questions to 24,000 respondents in 24 countries in March 2023. Previous surveys were fielded in September 2021 and March and September 2022. Responses were concentrated in North America, Europe, and East and South Asia.¹⁶

To construct the sustainable actions index, we then synthesized responses to questions corresponding to each of these three pillars and divided by the number of items (varied by respondent depending on nonresponses to specific items) and multiplied, resulting in a unique score on each dimension of the index. Scores are expressed as a percentage of all possible actions taken in each pillar (personal choices, workplace concerns, and citizen actions).

Below, we look more closely at how respondents’ financial well-being is shaping their sustainable choices. We largely focus on two measures. The first assesses how people gauge their financial situation relative to a year ago. This allows an assessment of how recent changes in finances might be impacting sustainable behaviors. The second looks at respondents’ perceived, self-assessed income level. In other words, do they see themselves as higher-, middle-, or lower-income? This provides a window into deeper questions about how economic status shapes sustainable actions.

Surprisingly, recent economic hardship explains relatively little of the variation. Some who are worse-off financially now compared to a year ago report pulling back from costlier sustainable purchases or prioritizing stability over sustainability at work, but in the aggregate, and across all three domains, the differences are modest. In contrast, the sharpest differences emerge when the data is split by self-reported income. Our data shows self-identified, higher-income respondents outpacing lower- and middle-income respondents on the collective behaviors as measured by our index pillars. The results suggest that the bifurcation in sustainable behaviors may be rooted in deeper, more systemic economic divides, not just a recent financial downturn.

It is perhaps unsurprising that those from higher socioeconomic groups are more likely to engage in sustainable purchasing behavior. The “green premium” has long been a barrier to wider adoption of environmentally friendly goods and services.¹⁷ Among all respondents who said they’d recently purchased a sustainable product, 40% said they’d paid more for it. Two-thirds of those recalled paying 20% or more extra compared to an alternative.

But our data shows even starker differences outside of purchase behaviors, including in the public sphere and at work. Respondents who see themselves as lower- or middle-income are much less likely to engage in political and civic behaviors with respect to climate change or the environment. Respondents who see themselves as financially worse-off are also much less likely to be supportive of climate action in the workplace, with higher-income respondents claiming to perform a variety of sustainable actions at nearly double the rate of lower- and middle-income employees. The data suggests that lower socioeconomic status creates barriers to sustainable behaviors across wide swathes of their lives.

Sustainable actions: Driven by access and opportunity, not attitudes

To be clear, the differences across socioeconomic status do not appear to be because those with fewer means are less concerned about the environment or are not interested in action to address climate change and other ecological crises.

Most respondents believe climate change is an emergency, and more than half of all respondents have felt anxiety about climate change in the last month, regardless of income. Respondents across income levels have talked with someone in their lives about climate in the last six months in similar numbers. These results show that both those at the top and bottom of the economic ladder are concerned and want change.

But for many, the “sustainable” choice is no choice at all. Consider just some of the discrepancies revealed by Deloitte survey data.

Personal choices: Who can afford to pay?

• Among self-identified, higher-income respondents, 59% say they always or often choose sustainable products, compared to just 44% of middle-income and 42% of lower-income respondents.
• Cost is a major concern when it comes to sustainable purchases. Among those who did not make a sustainable purchase in the last month, only 32% of higher-income respondents identified cost as the main purchase barrier, while 53% of lower-income respondents said the same.¹⁸
• One in four self-identified, higher-income respondents say they power their homes with renewables always or whenever possible, roughly twice the percentage of lower- and middle-income respondents. The cost of renewable energy has plummeted in recent years,¹⁹ but there can still be cost premiums or other financial barriers—including home ownership—to switching to renewables for households.²⁰

At work: Who has opportunity?

• Forty-six percent of higher-income respondents say they’ve considered switching jobs to work for a more sustainable company. Less than 20% of lower- and middle-income respondents said the same. “Climate quitting” appears to be an option only for some.³⁰
• Silence does not indicate satisfaction. Sixty-two percent of lower-income respondents have never talked with a supervisor about sustainability at work, but 77% say their employer isn’t doing enough to address climate change. In contrast, just 24% of higher-income respondents have not spoken with a supervisor about sustainability, and only 37% view their employer as not doing enough.

Civic actions: Who has voice?

• Twenty-five percent of lower-income respondents have never contacted a public official about climate issues, compared to 11% of higher-income respondents. Consistent with a large body of political science research,³¹ our data suggests lower-income respondents are less prone to engage in the political process relative to higher-income respondents.
• Twenty-four percent of higher-income respondents say they have donated to an environmental organization in the last year, compared with 13% of middle-income and 9% of lower-income respondents.
• Sixty-five percent of lower-income respondents have never attended a climate demonstration. Just 29% of higher-income respondents say the same.

Enabling sustainable actions for all

Divergences in climate action and sustainable behavior go beyond having the financial means to purchase an EV or local, organic produce. They also suggest deeper, structural issues. Those with lower incomes may not have the opportunity to advocate for climate action in their workplace in the same way that a wealthier person might. Or they might not have the same access to the political process. Academic research has consistently found that those with higher incomes tend to vote more often, attend more campaign events, and donate more to politicians.³² Given these barriers, it suggests there may be a “ceiling” for lower-income individuals’ ability to undertake some of the actions discussed here. And it may also suggest we should be cautious about the ways in which those with means affect climate and sustainability outcomes. Without opportunities and meaningful participation from across the socioeconomic spectrum, simply encouraging those with higher incomes to “do more” could risk entrenching existing systemic biases and inequalities, likely making the goals of climate equity and a just transition to a low-carbon economy even more difficult to achieve. Whether formulating a corporate net-zero plan or engaging in international negotiations, helping ensure climate discussions consider all voices with representation across socioeconomic, race, gender, and other dimensions, is critical.

To that end, organizations have an opportunity to make sustainable choices more available to everyone, regardless of socioeconomic status or current financial situation.

Companies, especially those with large numbers of workers across a variety of income levels, should test whether their sustainability efforts are reaching all employees. Companies can help ensure education and training programs are available to every worker and create channels through which employees can raise concerns and ideas for how to operate more sustainably.

Doing so proactively can help address a leading source of pressure, possibly improve morale and retention, and make companies a more attractive target for talent. More than half of C-suite executives surveyed by Deloitte in 2022 said employee activism on climate matters has led their organizations to increase sustainability actions over the last year—and 24% of those respondents said employee activism led to a “significant” increase.³³ Forty-two percent cited employee morale and well-being as a leading benefit of their companies’ sustainability efforts.

Consumer-facing companies can aim to scale sustainable goods and services to the point where they are the first choices based on their quality and price. Given the potential for price sensitivity, companies may have to innovate to bring the overall costs down continually.³⁴ They might also consider ways to tweak pricing such that conventional—and potentially more polluting—products wear a higher price tag.

Consider, for example, the development of EVs, which carried a significant price premium for many years and leading models were targeted firmly at higher-end buyers. In the United States, for example, most EV owners’ household income exceeded US$100,000 as of 2020.³⁵ But thanks in part to those early adopters’ willingness to pay extra, battery prices (the most significant contributor to EVs’ cost) have plummeted, falling almost 90% between 2010 and 2021.³⁶ The result: EVs recently reached 5% penetration in the United States, joining other markets in reaching a critical tipping point beyond which adoption often accelerates.³⁷ Many forward-thinking companies are working to put other product categories on the same trajectories by innovating green technologies and installing infrastructure.³⁸

Perhaps, more challenging consumer companies might work to associate affluence with simply consuming less. Such an approach may appear to clash with existing business models, but several companies are already voicing that iconoclastic message.³⁹ But it comes with potential benefits for companies, including brand loyalty and differentiation, especially among younger buyers. Thirty-seven percent of millennials and 33% of Generation Z respondents in a separate Deloitte survey say they already avoid buying fast fashion, and about 80% of respondents say they want business to do more to enable consumers to make more sustainable purchasing decisions.⁴⁰

Finally, governments have numerous policy tools they can consider. While political realities vary widely across the globe, leaders can be attuned to how policies differentially affect different income levels. For example, carbon taxes can be regressive⁴¹—although needn’t be if revenue is redistributed, as in Canada.⁴² Many governments are targeting subsidies and credits in such a way as to make green products more accessible to lower-income households. For example, some home electrification and EV rebates in the recent US Inflation Reduction Act are calibrated against household income.⁴³

Conclusion

There is a paradox at the heart of addressing climate change. Systems-level changes to the ways we produce energy, move people and goods, grow and consume food, and make things are key.⁴⁴ In that context, any individual’s action is like a grain of sand on a beach.

But at the same time, people are the ones who can act. Change won’t come, or won’t come fast enough, without the collective impetus of millions making new choices and working to help ensure that tackling climate change is on the agenda of companies and governments.

Organizations that want to address climate change without considering fairness and equity are likely missing out on important ideas and risk building their climate efforts on a shaky foundation. But climate action and equity can also positively reinforce one another.⁴⁵ Companies and governments can play an important role in enabling those they impact—whether customers, workers, or constituents—to have the opportunity to take action for a sustainable future.