Creating Emerging Markets Sustainability Series – Closing the ‘Intention-Action’ Gap
Cover image features Mavath R. Chandran (left) and Ghassan E. Nuqul (right).
The average American consumer today considers whether the everyday goods they purchase are sustainably sourced or produced, as evidenced by a recent study of U.S. consumer habits published by researchers at First Insight and the Baker Retailing Center at the Wharton School of the University of Pennsylvania. The study reported how more than two-thirds of consumers surveyed expressed a willingness to pay more for sustainable products. However, does willingness to pay translate to actual purchases at the grocery store?
Academics call this difference the “intention-action gap,” a significant problem when it comes to the production of sustainable consumer goods. An article featured in the July–August 2019 issue of Harvard Business Review entitled “The Elusive Green Consumer” in fact describes findings suggesting that while “65% [of consumers] said they want to buy purpose-driven brands that advocate sustainability, only about 26% actually do so.” The authors proceed to argue that companies have the power to close the intention-action gap with tools such as effective marketing which communicates their sustainable practices in a recognizable and transparent way.
The CEM project offers a unique insight into the issue from the perspective of leading executives in emerging markets, whose global companies produce everyday goods that have often struggled to demonstrate a significant shift towards sustainability. Here, we feature two such business leaders from Malaysia and Jordan:
- Mavath R. Chandran is one of the most influential figures in the Malaysian palm oil industry, as a founding member and advisor to the Roundtable on Sustainable Palm Oil (RSPO). Palm oil has been at the core of controversies surrounding commodities that contribute to significant environmental damage related to deforestation and loss of biodiversity. Chandran addresses how the RSPO has sought to create a sustainability standard that can curb environmental damage, while acknowledging criticisms arguing that the organization has not done enough. He contends that Malaysian and Indonesian producers of palm oil need assurances that their investments into sustainable production don’t result in a loss.
“It’s a question of whether the CGMs (the users of palm derivatives) and consumers are prepared to reimburse for the additional cost incurred for the certification process or a premium for the CSPO (Certified Sustainable Palm Oil) product. One can argue and say that ensuring sustainability is the right thing to do, therefore, do not expect a premium. That's all very well. But if you are a grower and you have put in resources to obtain the certification, then you would expect some sort of additional payment.” - Page 54 of Interview Transcript
Download this video clip as well as Mavath R. Chandran’s full interview transcript to learn much more about the challenges facing the sale of sustainably produced palm oil.
Ghassan E. Nuqul is Chairman of the Nuqul Group, a leading business group in Jordan which owns Fine Hygienic Holding – a global wellness company that sells hygienic and paper products. In his interview, Nuqul showcases how sustainability has been central to the company’s mission and image. He outlines specific steps that the company has taken in a way that echoes the marketing tools cited in “The Elusive Green Consumer,” expressing a clear message about their environmentally-friendly practices which consumers can incorporate into their purchasing decisions.
“With our pulp, we could source it at cheaper rates from companies that do not adhere to renewable forestry. However, we cannot buy or source – by doctrine – any pulp unless the company that produces it has an official certificate that they are part of the Renewable Forestry Clause. This means that for any tree they cut to produce our pulp, they have to plant a minimum of five. It’s between five and seven, but the minimum is five. If you hold our tissue box and turn it upside down, you will read this – that all our virgin pulp is sourced from renewable forestry.” – Page 33 of Interview Transcript
Take a look at this video clip as well as Ghassan E. Nuqul’s full interview transcript for further information on Fine Hygienic Holding’s sustainability practices – both in terms of what they mean for the company and what they mean for the market more broadly.